A spat between India based Apollo Tyres and US based Cooper Tires is quite evident now. Apollo Tyres Ltd has issued a statement saying that the company remains firmly of the belief that a merger with Cooper is compelling from a strategic perspective. “Contrary to Cooper’s complaint, we have been working diligently to address significant post-announcement impediments,” it said. The statement was issued in response to the complaint filed by Cooper Tire & Rubber Company with the Delaware Court of Chancery asking that subsidiaries of Apollo Tyres Ltd be required to expeditiously close the pending merger between the two tyre companies “in accordance with the terms of the definitive merger agreement”. The US tyre manufacturer is asking the court to compel Apollo to take actions so that the transaction may close. Among other matters, the complaint says that Apollo is seeking to delay an agreement with the United Steelworkers (USW). The USW represents Cooper employees at facilities in Findlay, Ohio and Texarkana, Arkansas. An arbitrator ruled on September 13 that, as result of the pending merger, Cooper and Apollo must enter into new agreements with the union prior to closing. By delaying resolution with the USW, Apollo is breaching the merger agreement, Cooper has alleged.
On the contrary, Apollo has asked Cooper to confirm that Cooper has sufficient control over and access to its majority-owned subsidiary in China to permit it to deliver current consolidated financial information and auditors’ comfort letters and that Cooper is in compliance with covenants and representations in the merger agreement. To date, Cooper has been unable or unwilling to provide these confirmations, Apollo Tyres stated. “Cooper's inability to access the facilities of its Chinese subsidiary, to determine what products this subsidiary is producing or to whom those products are being sold, to track or control how its funds are being spent or even to access operating or financial information, either physically or remotely, goes well beyond any typical work stoppage. Cooper has misrepresented its management and control of this asset to Apollo and to its own shareholders”, the statement from Apollo Tyres said.
“While Apollo continues to be supportive of Cooper’s efforts to establish control over its subsidiary’s operations and to assert Cooper’s rights against its JV partner, Apollo cannot be responsible for Cooper’s failures to do so,” it added.
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