Facts

Cooper Tire & Rubber Co. sued Apollo (Mauritius) Holdings Pvt. Ltd., Apollo Tyres B.V. and Apollo Acquisition Corp., asserting causes of action for specific performance, declaratory judgment, and breach of the parties' merger agreement. This lawsuit involved the proposed $2.5 billion merger of the two tire companies.

PLAINTIFF'S CONTENTIONS:
In June 2013, Cooper and Apollo entered into a merger agreement following negotiations between the parties. However, Apollo allegedly failed to consummate the merger by failing to obtain the consent necessary to consummate the merger. In an effort to avoid the merger, Apollo didn't use its "reasonable best efforts" to reach an agreement with the United Steelworkers and its Local Unions 207L and 752L (collectively, USW), to obtain the consent necessary to consummate the Cooper-Apollo merger. Thus, Cooper sought specific performance of Apollo's obligations to allow the merger to go through. As such, Copper requested this court to compel Apollo to enter into an agreement with the USW as soon as possible then compel Apollo to consummate with the merger.

DEFENDANTS' CONTENTIONS:
Apollo denied Cooper's allegations, and asserted that it had complied with its obligations under the Merger Agreement, including by working diligently to reach a new agreement with the USW, and that Cooper's desire to force a closing on an expedited schedule was motivated by its inability to access or control its Chinese subsidiary – a fact that would leave Cooper unable to produce financial results for the third quarter of 2013 and thereby failure to satisfy conditions to both the financing and merger agreements – along with various affirmative defenses. Apollo also asserted a counter-claim for declaratory judgment, arguing that Cooper was prematurely seeking to enforce the merger agreement before certain conditions had been met. As such, Apollo argued that Cooper, itself, was in material breach of the merger agreement.

Result

After a three-day bench trial, the Court of Chancery concluded that Apollo had acted in good faith and hadn't failed to use its reasonable best efforts to consummate the merger and denied Cooper's request for specific performance.