Use of the Kumho brand name was certainly a factor motivating Qingdao Doublestar Tire’s bid for a share in the Korean tyre maker. Although selected as the winning bidder, uncertainty now hangs over the terms under which the Chinese manufacturer can use the Kumho name, and this may suffice for Doublestar to walk away from the deal. Kumho Tire’s creditors are attempting to broker a compromise.
Qingdao Doublestar and Zenesis have made their first official comment on their operational joint venture, Doublestar Europe. Tyrepress.com reported last year that the company had been formed on 22 September 2016 between the Zenesis Group and the top five Chinese tyre manufacturer.
Moon Jae-in is South Korea’s new President, and this may be bad news for Qingdao Doublestar and its efforts to acquire a controlling share in Kumho Tire. In an article published earlier today, The Korea Times explored the possibility that Moon may prevent the Chinese tyre maker from acquiring Doublestar. According to the financial daily, analysts consider this a very real threat to the deal.
Speaking off the record, Chinese executives within Qingdao Doublestar have confirmed the company’s intentions to purchase well-known South Korean tyre manufacturer Kumho Tyre and that it is “now only Doublestar left to buy Kumho”. However, at roughly the same time, Korean newspapers have been reporting that Doublestar probably won’t have the right to use the Kumho brand name post-acquisition. With all this in mind, Tyres & Accessories summaries the story so far.
The latest development in the negotiations to sell a stake in Kumho Tire is that potential buyer Qingdao Doublestar Tire probably won’t, after handing over KRW 955 billion (£653.6 million) for the 42.01 per cent controlling share, be permitted to use the Kumho name.
Park Sam-koo says he won’t acquire a controlling stake in Kumho Tire from creditors unless they provide a definitive answer on specific conditions of sale. In a statement, Kumho Asiana has given the Korea Development Bank until 17 April to do this, otherwise it will not exercise its right of first refusal.
Although Park Sam-koo is said to have arranged sufficient funds to buy back a share in Kumho Tire from its creditors, some still doubt the transaction will go ahead. The Investor, the online business news service run by The Korea Herald, comments that many observers question whether Park will be able to pay the KRW 100 billion (£70.5 million) down payment for the deal.
Qingdao, China-based Doublestar Tire recently announced that it has launched an aramid-reinforced puncture-sealing passenger car tyre under the Crossleader brand.
If you would like the latest news from the Chinese tyre industry in Chinese, visit our partner site TyrepressChina.com. Or click below to continue on Tyrepress.