Indian tyremaker Apollo locks horns with U.S. bid target Cooper
MUMBAI (Reuters) - India's Apollo Tyres Ltd (APLO.NS) said its lenders were unlikely approve its bid for U.S.-based Cooper Tire & Rubber Co (CTB.N) unless the $2.5 billion price tag was cut to take account of unresolved labor disputes.
Worried that labor issues at some of Cooper's U.S. plants might bump up costs after the acquisition, Apollo had previously sought a price cut.
That request prompted U.S. lawsuit filed by Cooper asking the Indian company to close the deal "expeditiously".
Apollo responded on Monday by saying it might not be "feasible" for it and its lenders to accept the current deal, which has also been plagued by a dispute between the U.S. tyre maker and its joint venture partner in China.
A U.S. arbitrator has ruled that Ohio-based Cooper cannot sell two of its U.S. factories until a new collective bargaining agreement is reached between Apollo and members of the plants' union, the United Steelworkers (USW).
Apollo, 43 percent-owned by the New Delhi-based Kanwar family, said it had negotiated with the USW, "offering concessions well in excess of any that it reasonably could have been required to offer" under the acquisition pact.
"Apollo ...is continuing to negotiate in good faith with the union," it said in its reply, a copy of which was issued by the company.
Cooper did not immediately respond to an email seeking comment on Apollo's response to its lawsuit.
The Indian company said issues including those involving USW and Cooper's majority-owned Chinese joint venture, where workers have been on strike against the deal for three months, had made it difficult to close financing of the fully debt-funded deal.
Chengshan Group, Cooper's Chinese venture partner, has filed a lawsuit seeking to dissolve their joint venture.
"Negotiations with Cooper's Chinese employees and the Chengshan Group are ongoing," Apollo said, and it continued to work with Cooper to address the "impediments" that came up after the announcement of the deal.
(Reporting by Sumeet Chatterjee; Additional reporting by Aradhana Aravindan; Editing by John Stonestreet)