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Gurgaon-based Apollo Tyres on Tuesday said the Supreme Court in Delaware, US, had ruled in its favour in the tussle with Cooper Tire & Rubber Co over the completion of a $2.5-billion acquisition of the American tyre maker.
The Delaware court has dismissed Cooper’s appeal against an earlier lower court ruling that Apollo had not breached its obligations by reaching new contract terms with the union at Cooper’s plants in Ohio and Texas.
“We are pleased by the decision of the Delaware Supreme Court today, which did more than dismiss Cooper’s appeal. The court decided the appeal was improvidently granted in the first place,” Apollo Tyres said.
Cooper Tire had filed an appeal with the Delaware court against a partial ruling on November 8 that said Apollo and Cooper were “to continue to perform their obligations under the merger agreement” till December 31, till when the agreement remaines in effect.
<B>Still looking for a sensible way</B><BR>
“Cooper’s litigation strategy to date has done nothing but generate unnecessary cost for its shareholders and Apollo and compound the obstacles that Cooper’s situation has created for this merger,” Apollo added.
The Indian tyre maker said it continued to believe in the merits of the combination with Cooper and that “notwithstanding Cooper’s stated aim to continue to pursue its misguided legal claims, (Apollo) is committed to finding a sensible way forward, if possible”.
In October, Cooper filed a complaint in the Delaware Court of Chancery to push for completion of the acquisition, saying the Indian company was trying to delay an agreement with United Steelworkers, which represents Cooper’s employees at factories in Findlay (Ohio) and Texarkana (Arkansas). Apollo had denied the allegations but sought a cut in the deal value citing problems related to Cooper’s operations in China and concessions to be made to the union. Under the initial agreement, announced in June, Cooper shareholders would have to receive $35 a share, a premium of more than 40 per cent to its price before the acquisition announcement, valuing the deal at $2.5 billion. The merged company was slated to become the seventh largest tyre maker in the world.
After Tuesday’s ruling, Apollo can choose to cancel the deal or renegotiate with Cooper. Shares of Apollo Tyres closed at Rs 86.70 apiece, up by 2.3 per cent, on the BSE exchange.
