It looks like Cooper Tires will lose its stake in one of its two Chinese factories. It appears relations broke down with Chengshan Tires after the fallout of the Apollo purchase agreement, and Chengshan is exercising a clause in the contract that allows them to buy out Cooper.
http://thecourier.com/breaking-news/2014...hinese-factory/
Quote:
Cooper Tire & Rubber Co.’s disaffected partner in a factory in China, Chengshan Group Co., plans to buy Cooper’s 65-percent ownership stake in the venture, Cooper Tire reported.
The buyout would give Cooper Tire a $286-million warchest to invest elsewhere since Cooper Chengshan Tire Co. was valued at $440 million.
Roy Armes, Cooper Tire chief executive officer, said Cooper will likely be reinvesting in China, the world’s fastest-growing tire market. He called China a “core growth market for Cooper.” Chengshan Group also has already agreed to make Cooper Tires through mid-2018.
Cooper and Chengshan’s relationship fractured last year when the Chinese outfit opposed, then sabotaged Cooper’s proposed sale to Apollo Tyres, of India. When Chengshan shut out Cooper officials from the plant and refused to release financial records, it prevented banks from releasing financing for the sale. So Cooper and Chengshan officials this year agreed to end or mend their partnership. As part of that process, Chengshan was given first choice over whether to buy out Cooper’s stake in the Chinese factory.
Armes has said Cooper will keep doing business in China, regardless of what happens with the Chengshan venture.
Here's a WSJ article on the same topic:
Quote:
SHANGHAI— Cooper Tire & Rubber Co.’s Chinese partner said it would buy out the U.S. company’s majority stake in a local tire factory for $284.5 million, a potential setback to Cooper’s growth ambitions in the world’s largest car market.
A transaction would end Cooper’s ownership of a factory that was sometimes difficult to control, and that contributed to the high-profile collapse of the U.S. company’s own deal to be acquired by India’s Apollo Tyres Ltd.
That $2.5 billion deal was officially called off in December, in part because workers at the factory opposed working for the Indian company, highlighting the growing importance of Chinese and other workers’ impact on major global deals.
Cooper has another Chinese factory right now. It was launched as a joint venture with Kenda, but Cooper bought their share and now fully owns the factory.
http://www.tirebusiness.com/article/20110303/NEWS/303039999
Quote:
FINDLAY, Ohio (March 3, 2011) — Cooper Tire & Rubber Co. has agreed to buy the 50-percent stake in the Cooper Kenda Tire Manufacturing (Kunshan) Co. Ltd. joint venture in China it doesn't already own from Taiwan's Kenda Rubber Mfg. Co. Ltd. for $116.5 million.
Cooper anticipates completing the deal by March 15, at which time Cooper will rename the venture Cooper Kunshan Tire, contingent upon government approval.
The $200 million Cooper-Kenda joint venture car and light truck tire plant started production in early 2007 after a construction project of about 18 months. Cooper was guaranteed the plant's entire output for the venture's first five years.
http://thecourier.com/breaking-news/2014...hinese-factory/
Quote:
Cooper Tire & Rubber Co.’s disaffected partner in a factory in China, Chengshan Group Co., plans to buy Cooper’s 65-percent ownership stake in the venture, Cooper Tire reported.
The buyout would give Cooper Tire a $286-million warchest to invest elsewhere since Cooper Chengshan Tire Co. was valued at $440 million.
Roy Armes, Cooper Tire chief executive officer, said Cooper will likely be reinvesting in China, the world’s fastest-growing tire market. He called China a “core growth market for Cooper.” Chengshan Group also has already agreed to make Cooper Tires through mid-2018.
Cooper and Chengshan’s relationship fractured last year when the Chinese outfit opposed, then sabotaged Cooper’s proposed sale to Apollo Tyres, of India. When Chengshan shut out Cooper officials from the plant and refused to release financial records, it prevented banks from releasing financing for the sale. So Cooper and Chengshan officials this year agreed to end or mend their partnership. As part of that process, Chengshan was given first choice over whether to buy out Cooper’s stake in the Chinese factory.
Armes has said Cooper will keep doing business in China, regardless of what happens with the Chengshan venture.
Here's a WSJ article on the same topic:
Quote:
SHANGHAI— Cooper Tire & Rubber Co.’s Chinese partner said it would buy out the U.S. company’s majority stake in a local tire factory for $284.5 million, a potential setback to Cooper’s growth ambitions in the world’s largest car market.
A transaction would end Cooper’s ownership of a factory that was sometimes difficult to control, and that contributed to the high-profile collapse of the U.S. company’s own deal to be acquired by India’s Apollo Tyres Ltd.
That $2.5 billion deal was officially called off in December, in part because workers at the factory opposed working for the Indian company, highlighting the growing importance of Chinese and other workers’ impact on major global deals.
Cooper has another Chinese factory right now. It was launched as a joint venture with Kenda, but Cooper bought their share and now fully owns the factory.
http://www.tirebusiness.com/article/20110303/NEWS/303039999
Quote:
FINDLAY, Ohio (March 3, 2011) — Cooper Tire & Rubber Co. has agreed to buy the 50-percent stake in the Cooper Kenda Tire Manufacturing (Kunshan) Co. Ltd. joint venture in China it doesn't already own from Taiwan's Kenda Rubber Mfg. Co. Ltd. for $116.5 million.
Cooper anticipates completing the deal by March 15, at which time Cooper will rename the venture Cooper Kunshan Tire, contingent upon government approval.
The $200 million Cooper-Kenda joint venture car and light truck tire plant started production in early 2007 after a construction project of about 18 months. Cooper was guaranteed the plant's entire output for the venture's first five years.
