FINDLAY, Ohio—Cooper Tire & Rubber Co. expects its pending deal to buy control of a Chinese truck tire maker to be finalized before year-end, but the company also continues to evaluate other options for truck tire supply, especially in light of elevated tariffs on Chinese truck tires being studied by the U.S.
Cooper disclosed in January its plan to buy a 65 percent share in China's Qingdao Ge Rui Da Rubber Co. Ltd., a Pingdu, Qingdao-based company focused on truck tires.
Cooper has budgeted approximately $92 million for the acquisition and initial investments in the company, previously known as Qingdao Guang Ming Tire Co. Ltd.
Thus far Cooper has made a down payment of $5.93 million, according to its second-quarter 10-Q form filed with the Securities and Exchange Commission.
The down-payment is fully refundable in the event that the transaction does not close, Cooper said, and does not provide it with any power to direct the activities of GRT prior to the transaction's closing.
Cooper said it expects GRT—to be renamed Cooper Qingdao Tire Co. Ltd. after the closing—to serve as a global source of truck and bus radial tires for Cooper, which uses the Roadmaster brand name for truck tires.
Radial passenger tire capacity may be added, Cooper said.
In its filing, Cooper reminded shareholders that the GRT route is just a first step in its truck/bus tire sourcing strategy.
“We believe this investment remains prudent, and we are committed to continuing to deliver high-quality tires and superior value to our TBR customers,” Cooper said.
“I want to underscore that we are committed to the TBR business,” Hughes said, “and we'll continue to provide high-quality tires at a great value to our customers.”