Following a lengthy exchange process, Doublestar has successfully purchased a 45% stake in Kumho Tire for approximately RMB 3.9bn (US$584m) and officially becomes the controlling shareholder. Korea Development Bank (KDB) will continue to own 23% of the shares, maintaining its position as the second largest shareholder.
According to Doublestar, from the announcement in September 2016 that Kumho Tire was going to be sold through to completion of the deal, there have been many twists and turns. On January 18, 2017, Doublestar won the bid thanks to its strong presence in the Chinese market. However Doublestar and KDB later terminated the agreement without responsibility on September 6 for various internal and external reasons.
On March 2, 2018, KDB revealed it would re-introduce Doublestar to be the largest shareholder in the form of capital increase. However, Doublestar specified union consent as a precondition. Following some protest from the union, through the efforts of Doublestar, KDB and Kumho Tire management teams, and support from political leaders, the union gave its consent and the relevant agreement was signed. In total, it took more than 660 days to complete the transaction.
Chai Yongsen, chairman of Doublestar Group, said, “We are at a new starting point and hope to go from being a leader in tire development to one of the world’s greatest tire companies.
“Kumho is an expert in PCR tires, Doublestar in TBR tires. We are committed to ensuring that the cooperation between Doublestar and Kumho Tire is a model of friendship between China and South Korea, of China-ROK economic and trade cooperation, and of friendly relations between employers and employees.”
Doublestar says it will seize this opportunity to become a global player, especially in the Chinese market. Doublestar will exploit Kumho Tire’s position outside the Chinese market to effectively respond to the anti-dumping sanctions in various countries, in particular to effectively relieve the impact of possible trade wars.