War of words between Apollo, Cooper Tyres

 

The world famous tyre production units are in an exchange of texts.. Between Apollo Tyres and Cooper Tyres are doing the war of words over the latter’s control over Chinese facilities and misrepresentation of facts took a turn for the worse, with Apollo saying Cooper has failed to get auditor’s certification over its financials and the deal needs to be renegotiated.

The Chinese unit is key to the proposed $2.5 billion takeover of Cooper by Apollo Tyres and the Indian company is now asking Cooper to bring down the valuation if it wants the transaction to go through.

 “Cooper has acknowledged to Apollo that some price reduction is warranted. The issue now is by how much. On top of the USW issue, Cooper has breached material representations and covenants, including with respect to its majority-owned China subsidiary due to the fact that Cooper has no control over the subsidiary or access to its books and records,” Apollo Tyres said in a statement.

Apollo's statement came after Cooper sued it in the US courts asking the company to conclude the deal before the deadline. Apollo has retaliated by saying that it has asked Cooper to confirm that it 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.