Cooper Tire, the US tyremaker, has abandoned a planned $2.5bn takeover by India’s Apollo Tyres, after the deal became mired in legal disputes and cross-border misunderstandings.

The announcement ends what would have been the biggest takeover of a US company by an Indian company – an all-cash offer that ran into serious problems almost as soon as it was announced in June.

Workers at Cooper’s Chinese joint venture partner, Chengshan Group, reacted to the takeover announcement in July by seizing control of Cooper Chengshan Tire, which provides nearly 25 per cent of Cooper’s revenue. The deal also led to a dispute with the United Steelworkers union in the US. The union won an arbitration ruling giving it, in effect, a veto over the takeover until its concerns over jobs and pensions were addressed.