The headquarters of the Cooper Tire & Rubber Company is seen in Findlay, Ohio on September 17, 2004. Cooper Tire & Rubber Co. agreed to sell its automotive parts business for $1.17 billion and plans to spend some of the proceeds to build a tire factory in China. Photographer: Jay LaPrete/ Bloomberg News.
FINDLAY — Cooper Tire & Rubber Co. announced today it has terminated its merger agreement with Apollo Tyres, one of Indian's largest tire makers.
The proposed $2.2 billion sale of Cooper to Apollo Tyres would have created the world’s seventh-largest tire company.
Plans for the merger, announced in the summer, were never finalized. It has been troubled with problems at Cooper Tire plants in China and with labor agreements in the United States. Litigation has ensued, and the Findlay tire maker has indicated it wanted to end the merger.
“It is time to move our business forward,” Roy Armes, Cooper Tire chairman and chief executive officer, said in a statement.
“While the strategic rationale for a business combination with Apollo is compelling, it is clear that the merger agreement both companies signed on June 12 will not be consummated by Apollo and we have been notified that financing for the transaction is no longer available. The right thing for Cooper now is to focus on continuing to build our business.”
The company CEO touted Cooper Tire's financial strength, expecting to end the fiscal year "with a strong balance sheet."
Today's announcement is not expected to end the legal wrangling between the two companies.
“Apollo is disappointed that Cooper has prematurely attempted to terminate our Merger Agreement," Apollo Tyres said in a statement released today. "While Cooper’s lack of control over its largest subsidiary and inability to meet its legal and contractual financial reporting obligations has considerably complicated the situation, Apollo has made exhaustive efforts to find a sensible way forward over the last several months, however, Cooper has been unwilling to work constructively to complete a transaction that would have created value for both companies and their shareholders. Cooper’s actions leave Apollo no choice but to pursue legal remedies for Cooper’s detrimental conduct."
Cooper shares closed up 5.4 percent to $24.20.