China’s Doublestar To Buy Kumho Tire Stake In $830 Million Deal
China’s Qingdao Doublestar Co. said it has signed an agreement with Kumho Tire creditors to buy a 42 percent stake in the South Korean tyremaker in a deal that could enable Doublestar to further expand in China.
The deal, worth 955 billion won, or about $830 million, could help turn Doublestar into China’s largest tyremaker if it can fend off a potential counter bid from Kumho Tires’ chairman, who has said he wants to put together a consortium of investors to buy back the stake.
Just hours before the Doublestar deal was announced, Kumho Asiana Group said in a statement that its chairman Park Sam-koo would give up the right of first refusal if his request to buy the Kumho Tire stake is allowed. Park is in talks with several strategic investors including a Chinese company, said Yun Byung-chul, Kumho Asiana Group’s chief financial officer.
“We are not opposing Doublestar because it is a Chinese company,” Yun said in a briefing in Seoul, referring to claims by South Korea that China has been retaliating against Korean companies for the country’s decision to allow the U.S. to deploy a missile defense system on the Korean peninsula. “Considering various aspects of business management that we’ve done for about six decades, we expect there is more synergy with our buyout rather than a takeover by a foreign company,” he added.
A spokesman at Korea Development Bank, one of the creditors leading the stake sale, said its stance against Park making a bid has not changed.