FINDLAY, Ohio (Jan. 10, 2005) — Cooper Tire & Rubber Co. has reached an agreement to acquire about 11 percent of the common equity of South Korea´s Kumho Tire Co. Inc.
The acquisition is in connection with a planned initial public offering to be listed on the Korea and London stock exchanges, Findlay-based Cooper said, and is expected to close in the first quarter. The agreement is subject to a number of government and regulatory approvals.
Cooper Chairman, President and CEO Thomas A. Dattilo called the stake in Kumho´s global business “a wise investment for us as we begin the process of repositioning the company after the sale of Cooper-Standard Automotive.” The tire maker recently sold its automotive business for $1.17 billion in cash to an entity formed by Cypress Group and Goldman Sachs Capital Partners.
“We believe it is important for Cooper to form strategic relationships with other strong players in the global tire industry to realize a good return for shareholders and continue our planned growth in products, technology and market share,” he said in a prepared statement.
Initially, Cooper's investment in Kumho Tire will result in a positive return for shareholders, Cooper said, but in the long term, the investment will serve as a platform to explore synergies in various areas of shared interest. Mr. Dattilo said that even though both companies “will continue to operate independently, we believe we can partner in many areas for future benefit to all.
Cooper and Kumho are considered the world's eighth and 11th largest tire makers, with tire-related sales of $1.87 billion and $1.36 billion, respectively.