Cooper Tire closes Cooper Chengshan sale
Cooper Tire & Rubber Company reports that it has completed the sale of its 65 per cent ownership in Cooper Chengshan (Shandong) Tire Company Ltd (CCT) to Chengshan Group Company Ltd on 1 December for approximately US$262 million net of taxes and including dividends in accordance with the previously announced option agreement. Earlier reports suggested the price tag would be $268 million, which is consistent with Cooper’s net figure.
“Resolving the ownership of CCT has been a key goal for us, and we are pleased to have it completed as we continue to execute our long-term growth plans for China,” said Cooper chairman, chief executive officer and president Roy Armes, reaffirming that product supply should continue as normal: “With the closing, offtake agreements go into effect under which CCT will continue to produce Cooper-branded products, including Roadmaster tyres, through mid-2018. The purpose of the offtake agreements is to provide a secure source of product while also allowing Cooper the flexibility to continue to identify and develop alternative sources for these tyres.”
The answer to this question is now likely to case speculation but, according to the company, it could take a variety of forms including “an agreement with another supplier, a joint venture, an acquisition, adding capacity to our other facilities, buying a facility and running it ourselves, or building a new plant.”
In any case Cooper executives are confident that the firm has the clout to do what it must: “We have the financial capacity to take any of these paths or a combination that best serves our business and our customers,” Armes added.