Battlegrounds are drawn between Apollo Tyres and Cooper Tires even before the two unite.

Not to be the one to take all blame for the delay in completing the acquisition of the American company, Apollo said on Tuesday Cooper has failed to meet its contractual obligations under the merger agreement.

“Apollo Tyres Ltd on Monday filed its answer to the complaint filed by Cooper Tire & Rubber Company (US) with the Delaware Court of Chancery on October 4, 2013 as well as a counterclaim,” the Indian company said in a statement.

Apollo denied the allegations made by Cooper regarding the course of its negotiations with the United Steelworkers (USW). The Indian company said it has worked diligently to reach a settlement with the workers to enable Cooper to overcome the injunction obtained by USW that prohibited Cooper from consummating the merger.

“Apollo also asserted affirmative defences — 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,” the Indian tyre major said.

Apollo said it also filed a counterclaim seeking a declaratory judgment that the conditions precedent to the closing of the merger has 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,” it said.

However, Apollo maintained that the merger with Cooper is strategically compelling and it continues to work diligently to address the various post-announcement impediments preventing the merger from going through.

Apollo Tyres’ shares closed at Rs 65.05 on the BSE on Tuesday, down 2.11 per cent from the previous close.

>ronendrasingh.s@thehindu.co.in

Related Topics