FINDLAY, Ohio (Dec. 1, 2014) — Cooper Tire & Rubber Co. has completed the sale of its 65-percent interest in its Cooper Chengshan (Shandong) Tire Co. Ltd. (CCT) joint venture to China's Chengshan Group Co. Ltd. for approximately $262 million.
The sale price is net of taxes and includes dividends in accordance with the previously announced option agreement, Cooper said.
The deal includes previously disclosed offtake agreements for CCT to continue making Cooper-branded products, including Roadmaster radial truck tires, through mid-2018, Cooper said.
“Resolving the ownership of CCT has been a key goal for us, and we are pleased to have it completed as we continue to execute our long-term growth plans for China,” said Cooper Chairman, CEO and President Roy Armes.
Securing the offtake agreements is designed to provide a secure source of product while allowing Cooper the flexibility to identify and develop alternative sources for these tires, Mr. Armes said.
This process could include an agreement with another supplier, a joint venture, an acquisition, adding capacity to other Cooper plants, buying a facility and running it, or building a new plant, Mr. Armes said.
“We have the financial capacity to take any of these paths or a combination that best serves our business and our customers,” he added.
Cooper plans to host a webcast Dec. 4 to discuss the CCT transaction, the recently announced preliminary countervailing duties on certain passenger and light truck tires imported into the U.S. from China and the potential financial and business implications of these matters.
Cooper said the webcast, scheduled for 4:30 p.m. EST, may be accessed on the investor relations page of the company's website or by clicking here.
Chengshan Group disclosed Oct. 8 that it planned to exercise its option to acquire Cooper's 65-percent stake in the venture.
At $262 million, the agreed-to sale price puts the value of the venture at just over $400 million, or below the approximate “fair market value” determined by independent firm hired by Cooper.