Cooper Tire to Apollo: Hurry up with the merger already
On Monday, Cooper shareholders approved the merger, with 74 percent approving the $2.5 billion deal.
But today, it seems there’s a little trouble in paradise.
Here’s what Cooper said:
Cooper Tire & Rubber Company (NYSE: CTB) today filed a complaint in Delaware Chancery Court asking that subsidiaries of Apollo Tyres Ltd (NSE: ApolloTYRE) be required to expeditiously close the pending merger between the two tire companies in accordance with the terms of the definitive merger agreement.
Cooper stockholders voted overwhelmingly to approve the pending merger on Monday, September 30, satisfying Cooper’s final affirmative condition under the merger agreement for closing the $2.5 billion, all-cash transaction. The pending merger was announced on June 12 after the boards of directors of both companies unanimously approved the sale of Cooper to a wholly-owned subsidiary of Apollo for $35 per share.
Cooper is asking the court to compel Apollo to take actions so that the transaction may close. Among other matters, the complaint says that Apollo is seeking to delay an agreement with the United Steelworkers (USW). The USW represents Cooper employees at facilities in Findlay, Ohio and Texarkana, Arkansas. An arbitrator ruled on September 13 that, as result of the pending merger, Cooper and Apollo must enter into new agreements with the union prior to closing. By delaying resolution with the USW, Apollo is breaching the merger agreement.
“Cooper has an obligation to protect the rights of our stockholders, who voted overwhelmingly in favor of the merger. With their approval, we have met our conditions for closing. The complaint filed today is a necessary step in the process to assure that the terms of the merger agreement are met as required and that we do everything possible to get the transaction closed promptly,” said Cooper Chairman, Chief Executive Officer and President Roy Armes.
“The strategic rationale for the merger with Apollo is solid, and we look forward to finalizing the transaction, which will create the seventh-largest tire company in the world,” Armes continued. “Apollo is an outstanding company. We are confident both organizations will work effectively together to take advantage of the many opportunities this compelling transaction will offer within the world’s largest tire market of North America as well as the fastest growing geographies including China and India. Cooper is well positioned in the competitive global tire industry with highly respected brands, an extensive dealer and distribution network, quality products, outstanding customer service and top technical capabilities.”