FINDLAY, Ohio (Jan. 10)—Cooper Tire & Rubber Co. plans to buy an approximate 11-percent stake in the South Korean tire maker Kumho Tire Co. Inc. as a first step in its global repositioning strategy.
Cooper said the acquisition is in connection with Kumho's plan for an initial public offering on the Korea and London stock exchanges and is expected to close in the first quarter. A proposed purchase price was not disclosed.
"This is a wise investment for us as we begin the process of repositioning the company after the sale of Cooper-Standard Automotive," said Thomas A. Dattilo, Cooper´s chairman, president and CEO. Cooper recently completed the sale of its automotive unit for $1.17 billion.
"We believe it is important for Cooper to form strategic relationships with other strong players in the global tire industry to realize a good return for shareholders and continue our planned growth in products, technology and market share."
Initially, Cooper's investment in Kumho Tire will result in a positive return for shareholders, Dattilo said. Long term, he added, the investment will serve as a platform to explore synergies in various areas of shared interest.
"Even though both Kumho Tire and Cooper will continue to operate independently, we believe we can partner in many areas for future benefit to all," he said.
Cooper and Kumho are considered the world's eighth and 11th largest tire makers, with tire-related sales of $1.87 billion and $1.36 billion, respectively.