Apollo Tyres has not breached the buyout agreement with Cooper Tire, a US court has held.
The Delaware Chancery Court said that Apollo has used “reasonable best efforts” to negotiate with United Steelworkers (USW), which represents Cooper’s employees, and that, contrary to Cooper’s claims, “nothing in Apollo’s conduct indicates buyer’s remorse.”
Apollo’s $2.5-billion merger deal has been facing stiff resistance from the American firm’s employees in Findlay, Ohio, and Texarkana, Arkansas. On October 4, Cooper had filed a complaint before the Delaware court to push for completion of the merger, alleging that the Indian firm was trying to delay an agreement with USW.
In a statement on Saturday, Apollo said it continued to believe in the merits of the combination and was committed to finding a ‘sensible’ way forward.
However, Cooper Tire, in a statement, said it was disappointed with the court’s decision. “Cooper is assessing its options with respect to this decision and awaits the Court’s ruling on other open matters in this case,” it said. “There is a further ruling to be made. I do not have a date for that. The case has not concluded," said spokesperson Anne Roman.
The company was hoping Judge Sam Glasscock would order Apollo to accept a labour agreement that Cooper had negotiated and then order that the buyout deal be closed on its original terms. When the two companies announced the deal in June, they had expected it to close by October 4.
Cooper had alleged that by delaying resolution of the dispute with USW, Apollo was in breach of the merger agreement. The Ohio-based company also maintained that the situation with USW and the joint venture partner and union in China were risks that Apollo assumed under the merger agreement. Earlier this week, Cooper said it had reached tentative agreements with USW to help it close the deal with Apollo.