FINDLAY, Ohio (March 22, 2010) — Cooper Tire & Rubber Co. has received final approval from China to increase its ownership in its Cooper Chengshan (Shandong) Tire Co. Ltd. joint venture in China to 65 percent.
Chengshan recently notified Findlay-based Cooper Tire it was exercising a put option on a 14-percent stake in the companies' joint venture. Chengshan's share will drop to 35 percent following the change.
Cooper has budgeted $17.9 million for the stake and anticipates making the transaction during the first quarter.
Chengshan first notified Cooper in July 2009 it was considering this option.
In connection with its acquisition of Cooper Chengshan in 2006, Cooper accepted a put option that obligates it to buy from Chengshan its minority holding anytime from Jan. 1, 2009, through Dec. 31, 2011. The tire maker declined to comment on Chengshan's reasons for exercising its put at this time.
Cooper has budgeted a minimum of $62.7 million for the entire 49-percent share, according to its latest 10-K filing.
Cooper Chengshan operates a factory in Chengshan with 9 million units of annual capacity for passenger, light truck and medium truck tires.