Cooper terminates merger agreement with Apollo Tyres
The end of 2013 wasn’t just as merry for Indian Apollo Tyres with Cooper Tire & Rubber Company (NYSE: CTB) today announcing termination of their merger agreement with Apollo (NSE: ApolloTYRE). Cooper continues their focus on building its Business.
â€śIt is time to move our business forward,â€ť said Cooper Chairman, Chief Executive Officer and President Roy Armes. â€śWhile 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.â€ť
â€śOur business model is strong, and despite the challenges this year, we are coming off record operating profit through the first half of the year and expect to continue to be profitable for the second half, ending the year with a strong balance sheet. We look forward to continuing to execute on our strategy in 2014, and we have a very strong base from which to do thisâ€”brands that are respected for quality, a loyal customer base, a flexible global network of manufacturing facilities, a skilled workforce, and top technical capabilities,â€ť Armes said.
â€śAddressing 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. 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,â€ť he added.
â€śWhile Cooper believes Apollo has breached the merger agreement, and we will continue to pursue the legal steps necessary to protect the interests of our company and our stockholders, our focus will be squarely on our business and moving it forward,â€ť he concluded.
Apollo Tyres Ltd in response issued the following statement.
â€śApollo is disappointed that Cooper has prematurely attempted to terminate our Merger Agreement. While Cooperâ€™s lack of control over its largest subsidiary and inability to meet its legal and contractual financial reporting obligations has considerably complicated the situation, Apollo has made exhaustive efforts to find a sensible way forward over the last several months, however, Cooper has been unwilling to work constructively to complete a transaction that would have created value for both companies and their shareholders. Cooper’s actions leave Apollo no choice but to pursue legal remedies for Cooper’s detrimental conduct.
â€śImportantly, Apollo has many other compelling growth opportunities around the world that we are continuing to pursue. Our business is performing well â€“ as evidenced by the strong top and bottom line results we reported last quarter â€“ and we remain focused on executing our standalone strategic plan to maximize value for Apolloâ€™s shareholders. We are confident that Apollo is well-positioned for continued success.â€ť