Apollo files counter claim against Cooper Tire

While filing a counter claim against Cooper Tire, Apollo Tyres’ reply to the Delaware Court of Chancery on October 14 stated that the US-based tyre company has failed to meet its “contractual obligations under the merger agreement”.

Apollo was responding to a complaint filed at the same US court by Cooper on October 4, that alleged Apollo was delaying agreement with Cooper’s worker union (United Steelworkers) to get a lower buyout price, and that Apollo has been aware of the risks at Cooper’s China subsidiary, which is opposed to the merger and is facing a strike.

“Apollo denied the allegations made by Cooper regarding the course of its negotiations with the United Steelworkers and confirmed that it has worked diligently to reach a settlement with the United Steelworkers to enable Cooper to overcome the United Steelworkers injunction prohibiting Cooper from consummating the merger,” Apollo said in a statement.

It added, “Apollo also asserted affirmative defenses, including that conditions precedent to closing had not been satisfied because the marketing period for the financing, central to Cooper’s claims in its complaint, had never commenced and that Cooper has failed to meet its contractual obligations under the merger agreement”.

Apollo’s counter claim seeks a “declaratory judgment that the conditions precedent to the closing of the merger have not been satisfied”.

“Apollo’s response details Cooper’s failures to provide information required to be provided under the merger agreement due in part to its lack of control of its Chinese subsidiary, Cooper Chengshan Tire, as well as Cooper’s breach of several representations, warranties and covenants in the merger agreement,” Apollo’s statement said.

Apollo, however, remained positive if completing the merger deal, initially pegged at $2.5 billion at $35 a Cooper share — the largest in the domestic auto sector till date. “Apollo reaffirms that it believes that a merger with Cooper is strategically compelling and that it continues to work diligently to address the various post-announcement impediments preventing Cooper from consummating the merger,” it said.