Apollo Tyres Limited (BOM:500877) acquisition of Cooper Tire & Rubber Co (CTB.N) valued at $2.5 billion is still far from over as the former is miffed over significant and unanticipated cost, which it will have to bear due to labor issues, says Reuters.

Cooper pushing for a deal

Apollo Tyres, an Indian based company, said that due to labor issues in the United States, the homeland of Cooper Tire & Rubber Co, and in China, they will have to bear the cost, which was not known at the time of initial talks.

“Cooper has acknowledged to Apollo that some price reduction is warranted. The issue now is by how much,” Apollo said in a statement on Sunday.

Separately, Cooper said that change in price is not necessary, and it has filed a complaint, on Friday, in the United States court asking Apollo to conclude the deal within the stipulated time.

Cooper Tire & Rubber Co shareholders will be paid $35 per share under the initial agreement, which is a premium of 40 percent over the prior to the acquisition price. Total deal is valued at $2.5 billion. According to Cooper, risks cited by Apollo in the proposed deal are tussle with the USW (United Steelworkers) and the joint venture partner and union in China.

Agreement with United Steelworkers important

Apollo Tyres is in the process of cutting out a deal with the United Steelworkers, who represents employees of Coopers in the United States. The deal is important as the United States arbitrator ruled that Cooper is not authorized to sell two of its factories in the country before a collective bargaining agreement is set between Apollo and members of plant union.

Apollo said that it has conveyed to the USW that it is willing to make material concessions, subject to an arrangement for additional financing or financial concessions.

Issue much complex in China

Workers at Cooper’s joint venture in China have been raising concerns over the deal for the past three months; also Cooper’s local partner is seeking to end the business arrangement.

Chinese Plant union revealed, last month, that workers are in a denial mode over making Cooper branded tires and will also put a halt on the Joint Venture’s production, operation and financial information into data system.

Apollo said in a statement “Cooper has misrepresented its management and control of this asset to Apollo and to its own shareholders.” Additionally it said that if Cooper fails in gaining control over its subsidiary operations and fails to declare its right over JV partner then Apollo is not responsible for that.