TUPELO, Miss. (WCBI) — Sometimes you have to state the obvious.
Cooper Tire did just that Monday… announcing it is terminating merger efforts with India-based Apollo Tyre.
The $2.5 billion deal, initially announced in June, has been on the rocks since August with the two sides debating over labor issues in the United States and China, financing and other parts of the merger.
The deadline to close the deal is Tuesday and Cooper officials admitted it isn’t happening. The company, which employs 15 hundred people at its Tupelo plant, said it is time to move on.
Cooper officials say the company will now focus on resolving its production issues in China and growing its business worldwide, with or without a merger partner.
COOPER TIRE PRESS RELEASE
FINDLAY, Ohio, USA – December 30, 2013 – Cooper Tire & Rubber Company (NYSE: CTB) today announced it has terminated the merger agreement with Apollo Tyres (NSE: ApolloTYRE).
“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.”
“Our 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 this—brands that are respected for quality, a loyal customer base, a flexible global network of manufacturing facilities, a skilled workforce, and top technical capabilities,” Armes said.
“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. 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,” he added.
“While 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,” he concluded.
About Cooper Tire & Rubber Company
Cooper Tire & Rubber Company is the parent company of a global family of companies that specialize in the design, manufacture, marketing, and sales of passenger car and light truck tires. Cooper has joint ventures, affiliates and subsidiaries that also specialize in medium truck, motorcycle and racing tires. Cooper’s headquarters is in Findlay, Ohio, with manufacturing, sales, distribution, technical and design facilities within its family of companies located in 11 countries around the world. For more information on Cooper Tire, visit http://coopertire.com, www.facebook.com/coopertire or www.twitter.com/coopertire.