Cooper Extends Chengshan Share to 65% for $18 million

Cooper Tire & Rubber company has extended its majority shareholding of it Chengshan (Shandong) Tire Co Ltd joint venture to 65 per cent. The share acquisition cost Cooper roughly $18 million and came at the behest of minority shareholder Chengshan Group, which exercised a so-called “put” option negotiated as part of the company’s initial Cooper Chengshan investment.

Cooper’s director of investor relations, Curtis Schneekloth, told Tyres & Accessories the transaction should be executed in the first half of this year, adding:

“Cooper is happy for the opportunity to continue increasing our ownership [of] the operation. I will not speculate why they have decided to exercise the put, but they have commented that they are happy with the performance and direction of the operations.”

According to an SEC filing, Chengshan now has until 31 December 2011 to exercise the rest of its put option. If it does this, the Chinese company has the right to expect no less than $62.7 million for its total shareholding. Having sold 14 per cent to Cooper for a reported $17.9 million, Chengshan can expect a minimum of $44.8 million for the remaining 35 per cent.

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