Apollo Tyres files counterclaim against Cooper

Daily Journal

The back-and-forth exchange between Cooper Tire & Rubber Co. and Apollo Tyres Ltd. continues.

India-based Apollo filed a counterclaim against Cooper in Delaware Chancery Court on Monday, saying Findlay, Ohio-based Cooper has not provided the information necessary to close their merger.

In June, Apollo offered $35 a share for Cooper in a deal valued at $2.5 billion that would create the world’s seventh-largest tire maker.

The counterclaim is the latest move in a monthslong battle between the two companies. Apollo is asking for a judgment that Cooper hasn’t provided documents and met other requirements for a merger. It’s also asking for court costs and “reasonable” attorneys’ fees.

The merger was approved by boards of both companies and later by Cooper shareholders, but it has been delayed by talks with the United Steelworkers union, which represents Cooper workers in Findlay and Texarkana, Ark.

Cooper’s plant in Tupelo is not represented by the union, although USW representatives have been seeking to organized the plant since at least August.

An arbitrator ruled last month that Cooper and Apollo must enter into new agreements with the union prior to closing.

On Oct. 4, Cooper asked the Delaware court to compel Apollo to close the deal. Cooper, which is based in Findlay but incorporated in Delaware, said Apollo is delaying reaching agreements with the union. The union has said it is concerned about workers’ jobs because Apollo would finance the sale with debt.

In its counterclaim, Apollo said it has met with the USW five times, but accuses Cooper of “communicating to the USW about USW’s bargaining position and providing encouragement to the union and indicating concessions sough from Apollo greater than those that Cooper knows Apollos is willing to provide are reasonable.”

Apollo said that it is working diligently to reach a settlement but that a reduction of the deal’s price is warranted.

The company said it is still waiting for Cooper to provide information, particularly from its Chinese subsidiary Cooper Chengshan Tire, or CCT. Workers in China are also protesting the merger, and Apollo faulted Cooper for its “lack of control of its Chinese subsidiary.”

“In short,” the counterclaim said, “Cooper simply has no control of CCT and its property, assets, operations and financial records.”

Apollo also claims Cooper did not have control of CCT when the companies agreed to the merger.

Despite the troubles, Apollo said it still wants the merger.

“This is not a case of buyer’s remorse,” it said. “Apollo has long seen the strength of the strategic fit between Apollo and Cooper. It still sees that fit, and it is committed to acquiring Cooper.”