Apollo Asks Cooper Tire for Discount on Proposed Sale

Apollo Tyres Ltd. wants to lower the $2.5 billion it has offered to pay for Cooper Tire & Rubber Co. because of "significant and unanticipated" costs likely if the deal goes through.

The Indian company points to costs related to labor issues at a U.S. factory and claims Cooper misrepresented its control of a tiremaking venture in China.

Apollo's demand follows a Cooper lawsuit filed in in the U.S. on Friday that demands Apollo be required to "expeditiously close the pending merger" under the original terms.

The deal has struggled with hurdles since it was announced in June. Last month an arbitrator barred Cooper from including two U.S. tire plants in the U.S. in the sale until the union that represents the hourly workers there reaches agreement with Apollo on labor issues.

In China, workers at its 65%-owned venture with Chengshan Group in Shandong stopped making Apollo-branded tires and have blocked Cooper managers from entering the facility. Apollo says Cooper has lost control of the facility, since it has no access to its books and records.

Apollo claims that Cooper has agreed that a price cut is warranted. Cooper denies making any such statement. It retorts that the issues Apollo raises were prompted by the purchase offer itself and are risks the Indian company assumed in making its bid.