QINGDAO, China — Qingdao Doublestar Group and its subsidiary Xingwei Korea Co. Ltd. have signed a contract to acquire a 45-percent stake in Kumho Tire Co. Ltd. through a $607 million private placement.
The agreement was signed with Kumho and its creditor representative Korea Development Bank.
Doublestar will purchase 129.3 million Kumho shares at $4.70 per share and become its controlling shareholder, according to a statement by the group's listed entity on April 10.
According to the announcement, Kumho has annual production capacity of 60 million units at its eight plants — three each in South Korea and China, and one each in the U.S. and Vietnam.
Doublestar said it pledges to eliminate horizontal competition between its subsidiary companies and Kumho within five years upon the deal's completion.