SEOUL, South Korea (Jan. 28, 2002) — Group Michelin has agreed to acquire a 10-percent share of Hankook Tire Co. Ltd. under a partnership agreement that includes Michelin licensing its Pax extended mobility tire-wheel system to Hankook, which in turn will manufacture tires for the French firm.
The partners will cooperate in areas of research and development, manufacturing and distribution under the deal signed Jan. 28 in Seoul, according to a Michelin statement. The agreement was inked by Choonh Hwan Cho, Hankook president, and Jean-Marc Francois, president of Michelin Asia-Pacific.
Buying a 10-percent stake would cost Michelin about $35 million, according to analysts who cover Michelin.
The partners plan to implement the deal in several phases, though they have still to hammer out its precise terms, according to Michelin. The main focus. however, will be “for Michelin to license its Pax run-flat tire system to Hankook and of an agreement for the fabrication of tires for Michelin by Hankook, as well as on the optimization of the distribution of their respective products in certain markets.”
The Korean deal is “yet another step in Michelin's development plans in Asia," according to Mr. Francois, in the company statement, which also cited “Hankook's potential to grow as one of the major tire companies globally.” Seoul-based Hankook is the world's 11th largest tire maker with 2001 tire sales of around $1.1 billion, compared to $13.4 billion for market leader Michelin.