Cooper Tire & Rubber Co. is calling off its sale to India’s Apollo Tyres, unraveling a $2.2 billion deal announced just over six months ago.
Cooper said financing no longer is available and it continues to claim, as it has for months, that Apollo breached terms of the agreement.
Apollo said after the announcement Monday, which it called disappointing, that it might pursue legal remedies.
Both companies agreed to the sale in June, but things deteriorated rapidly. Negotiations with the union representing Cooper employees became a sticking point.
Apollo sought a better price, citing labor issues in China and weaker profit, which Cooper said was a stalling tactic.
Cooper, a Findlay, Ohio, company, took its claim to a Delaware court, but a ruling last month found no breach of obligations on Apollo’s part.
Chairman and CEO Roy Armes said during a brief webcast Monday morning that Cooper never received a new offer from Apollo that came with committed financing, and that presented “unreasonable risk” for his company.
Company executives vowed to pursue a reverse termination fee of $112.5 million and other possible damages. They do not believe the company owes Apollo a $50 million termination fee that was part of the initial agreement.
Cooper will return to court with Apollo to resolve some remaining issues, including whether Apollo made an appropriate effort to reach a deal with the union, said Chief Financial Officer Brad Hughes.
Apollo Tyres Ltd. said Monday that it had made “exhaustive efforts to find a sensible way forward over the last several months.”
Shares of Cooper rose $1.24 on Monday, closing at $24.20.
Company shares soared to nearly $35 in June after it announced the buyout, but they had fallen steadily since then.