Perhaps one reason why Cooper Tire’s joint-venture plant in China went on strike was this: Cooper’s partner in the facility, Chengshan Group Ltd., made a merger offer for Cooper.
But Cooper instead accepted a bid by India-based Apollo Tyres Ltd., in June.
The 5,000 workers at Cooper Chengshan Tire Co. in eastern China in July went on strike, refusing to manufacture Cooper-branded tires. They also prevented Cooper management from getting to their offices and accessing information. That, despite Cooper having a 65 percent majority interest in the joint venture.
The Chengshan Group said it didn’t approve of the Apollo merger, citing cultural differences and concerns with the company’s ability to pay the debt on the $2.5 billion deal.
The merger offer was revealed in Delaware Chancery Court on Tuesday, where a judge is deciding on Cooper’s lawsuit asking it to force the merger with Apollo.
Cooper accuses Apollo of dragging its feet; Apollo says Cooper hasn’t provided the financial information it needs to go though with the merger, and has asked to lower its bid by as much as $9 from its original $35-per-share offer. It also said Cooper has lost control of its CCT operation in China. Cooper said Apollo knew the risks when it entered merger talks.
Cooper also is asking the judge to force Apollo to accept a temporary labor deal it reached with the United Steelworkers union. An arbitrator ruled in September that Cooper’s two U.S. plants in Findlay, Ohio, and Texarkana, Ark., could not be sold until a labor agreement had been reached with the USW, which represents workers at the two plants.
Last week, Cooper said it had reached a tentative deal with the union, pending approval by both USW workers and Apollo. The deal is good only through mid-November. Apollo called it a last-minute “stunt.”
A ruling in the case is expected today.