Doublestar to acquire financially troubled Hengyu

Qingdao, China – Doublestar plans to acquire tire maker Hengyu Technology, currently undergoing bankruptcy restructuring, for €118 million (899 million yuan).

The investment will go through Jixing Tire, a subsidiary of Doublestar, said the company’s announcement on 15 March.

Hengyu currently has 650,000 unit annual truck and bus tire capacity and 6 million unit annual passenger car tire capacity on stream since 2015, Doublestar’s board office told ERJ.

The capacity at Dongying could be respectively raised to 800,000 and 10 million when a facility upgrade is completed, according to Doublestar.

The financially troubled company is located in Dongying, Shandong, a city close to Doublestar’s headquarters city Qingdao.

Hengyu’s product portfolio also includes engineering tires and military tires, said the announcement.

As of mid 2018, Hengyu’s unaudited stockholders’ equity was pegged at -€91 million and its market value at €162 million.

Such merger & acquisition deals, stated Doublestar: “will help the company’s expansion and capacity optimisation and gain advantages in competition.”

The company’s Qingdao site currently has 4 million unit annual truck and bus tire capacity and 6 million unit annual passenger car tire capacity, its office told ERJ.

Doublestar said its second site in Shiyan, Hubei – a relocation project that started in June 2018 – will have capacity for 1.5 million units/year of truck and bus tires and 5 million units/year passenger car tires.