Cooper Tire & Rubber, which is based in Findlay, Ohio, has said that it will not accept sale of the company to India's Apollo Tyres.

Apollo Tyres, based in Gurgaon near New Delhi, had launched a $2.5 billion merger plan around six months earlier. Cooper said that the financing for the deal is not available and said that Apollo breached the terms of the agreement. Both the companies had agreed to the sale earlier in June but the deal began to fall apart after negotiations with Cooper employees did not proceed as planned.

Cooper Tire said it would seek damages and that the transaction lacked financing while Apollo said it's disappointed and will also consider legal actions. The Indian tire-maker planned to fund the purchase through debt and it had hired Morgan Stanley and Deutsche Bank AG to manage a $1.88 billion sale of high-yield bonds issued by Cooper. Standard Chartered Plc has underwritten a $450 million bridge loan for the company, according to Chief Financial Officer Sunam Sarkar.

Shares of Apollo climbed as much as 15 percent and traded 5.5 percent up at 106.90 rupees this morning in Mumbai as investors were relieved that the Indian firm will not have ti take on too much debt.