FINDLAY, Ohio - Cooper Tire & Rubber Co. is calling off its proposed $2.2 billion buyout by India's Apollo Tyres, a deal that would have created the world's seventh largest tire company.Cooper said Monday that financing is no longer available and that it still believes Apollo breached the terms of the agreement. "It is time to move our business forward," said Cooper Chairman, Chief Executive Officer and President Roy Armes. "While the strategic rationale for a business combination with Apollo is compelling, it is clear that the merger agreement both companies signed on June 12 will not be consummated by Apollo and we have been notified that financing for the transaction is no longer available. The right thing for Cooper now is to focus on continuing to build our business."
Apollo representatives did not immediately respond to a request for comment from The Associated Press.
The boards of both companies and Cooper shareholders approved the buyout, but negotiations with the union representing Cooper employees became a sticking point. An arbitrator ruled that Cooper and Apollo must create new agreements with the union, but a court rejected Cooper's claim that Apollo breached the terms of the deal.
"Once the situation at CCT is resolved and regular financial reporting has resumed, Cooper will be in a position to address additional options for the deployment of capital targeted at returning value for our stockholders," Armes added.
"Addressing the situation at Cooper Chengshan Tire (CCT) in Rongcheng, China is our top priority in the near term. The issues at CCT were driven by the merger agreement, and with the agreement now terminated, Cooper is working independently to restore normal operations at CCT, including obtaining the information needed for Cooper to resume regular financial reporting as soon as possible."
Shares of Cooper, based in Findlay, Ohio, slumped 4 percent before the opening bell.