Bloomberg this morning reported that a Chinese court has delayed a scheduled hearing on a suit brought by one of Cooper Tire & Rubber Co.’s partners in an effort to halt Apollo Tyre’s acquisition of the U.S. tiremaker.
The Weihai Intermediate People’s Court cancelled a set Sept. 24 hearing and did not announce a new date. Chengshan Group filed action on July 29 seeking dissolution of its current joint venture with Cooper, claiming Apollo’s purchase of Cooper would undermine the Chinese company’s operations.
Cooper reportedly denied the claim by Chengshan Group, it partner in the Cooper Chengshan plant in China’s Shandong Province. Some 5,000 workers at that plant, Cooper’s largest in China, went on “strike” in late July to supposedly protest the proposed $2.5 billion Apollo-Cooper deal, claiming the change to an Indian management culture for harm the future of the plant.
The plant is reportedly back to limited production, turning out all but Cooper-branded tires, reports claim.
The Bloomberg story did say that Apollo feels the litigation is “’immaterial’ to the acquisition and that the only pending approval is from shareholders on a vote at the end of the month.”
“’The lawsuit may lead to some further delay in the closing of the deal as it may change the value of the transaction,’ said Basudeb Banerjee, an analyst at Quant Broking Ltd. in Mumbai. ‘If the joint venture is dissolved, then it may reduce the price for Apollo.’”
