Cooper Tire & Rubber Company terminated its merger agreement with affiliates of Apollo Tyres Ltd on December 30 2013 – one day before the agreement's 'drop dead' date – after it became clear that Apollo's financing sources would not renew their commitments past December 31. The merger agreement, signed on June 12 2013, provided that Apollo, an India-based tyre manufacturer, would acquire Cooper for $35 per share in cash.

The announcement of the deal met with negative market reactions, as well as serious labour disputes. In September, an arbitrator ruled that the merger could not close unless Apollo reached a new collective bargaining agreement with the United Steelworkers (USW). When Apollo did not reach an agreement with USW in the weeks following the arbitrator's decision, Cooper sued in the Delaware Court of Chancery, arguing that, based on the terms of the merger agreement, the court should order Apollo to make an agreement with USW "in the most expeditious manner possible". The court disagreed, ruling that Apollo's obligation to negotiate with USW was governed by a "reasonable best efforts" standard, and that Apollo had met this standard.

Following the termination, the parties are expected to continue litigating the issue of damages, in addition to whether the circumstances of the termination entitle one party to receive a termination or reverse termination fee.

For further information on this topic please contact Marko S Zatylny at Ropes & Gray LLP's Boston office by telephone (+1 617 951 7000), fax (+1 617 951 7050) or email (marko.zatylny@ropesgray.com). Alternatively, contact James C Davis at Ropes & Gray's Chicago office by telephone (+1 312 845 1200), fax (+1 312 845 5500) or email (james.davis@ropesgray.com). The Ropes & Gray website can be accessed at www.ropesgray.com.