Beijing – Qingdao Doublestar Group has concluded its acquisition of a 45% ownership stake in South Korea's Kumho Tire Co. Inc., closing an 18-month chapter of uncertainty in Kumho's 58 year history.
Qingdao Doublestar Group and its Korean subsidiary Xingwei Korea Co. Ltd. signed a contract in April with Korea Development Bank to acquire KDB's stake in Kumho Tire through a $607 million private placement.
By doing so, Doublestar becomes Kumho Tire's controlling shareholder, while KDB and other Kumho creditors will remain the second largest shareholder with a 23% stake. The remaining 22% of Kumho Tire's shares are in other private hands.
The deal brings together companies that have complementary strengths in consumer (Kumho) and commercial tires (Doublestar), according to Doublestar Chairman Chai Yongsen.
"I believe that the synergy and integration of our two companies will produce a multiplier effect," he said. "Through products, technology, manufacturing and services that represent the future of the global tire industry, we will become one of the world's greatest tire companies.
Doublestar was the No. 24 ranked global tire maker in 2017 with fiscal 2016 sales of $1.06 billion (0.9 billion), while Kumho was No. 14 with sales of $2.52 billion, according to ERJ rankings.
This deal is Doublestar's second attempt to buy into Kumho. It initially was selected by KDB in January 2017, but that deal unravelled throughout the ensuing nine months and was annulled eight months later, in mid-September.
With a history of 58 years, Kumho Tire is the second largest tire company in South Korea. It has eight factories and five research and development centres around the world.
Doublestar said it is known as a leading "intelligent manufacturer" of tires in China. It is the only company in the world that owns both an "Industry 4.0" factory for commercial tires and an "Industry 4.0" factory for passenger tires.