China's Doublestar takes control of South Korea's Kumho Tire in $597 mln deal (updated)

Kumho Tire

05/03/2018 06:02

(Adds union mulling strikes)
    SHANGHAI, March 5 (Reuters) - China's Qingdao Doublestar Co
Ltd  000599.SZ  said on Monday that its parent had agreed to pay
646.3 billion won ($597.4 million) for a 45 percent stake in
South Korea's troubled Kumho Tire Co Inc  073240.KS .
    A unit of its controlling shareholder, Doublestar Group,
would buy 129.3 million ordinary shares in Kumho Tire, capping a
lengthy takeover process, the Chinese firm said in a statement
to the Shenzhen exchange.
    In September, Korea Development Bank (KDB) and other Kumho
Tire creditors terminated an $872 million deal to sell a stake
in Kumho to Doublestar after the Chinese firm demanded a cheaper
price, citing the tyre maker's weakening profits.
    An over-ambitious acquisition strategy run by Kumho Tire's
former parent company before the global financial crisis left
the conglomerate saddled with debt, leading to Kumho Tire being
put under a creditor-led debt restructuring in late 2009.
    In January last year Kumho Tire said that Doublestar had
been chosen as the preferred bidder to buy a controlling stake
in the firm. The South Korean firm's creditor originally put the
stake up for sale in 2016.  urn:newsml:reuters.com:*:nL4N1F70AE
    KDB said on Friday that the sale to Doublestar would help
Kumho Tire expand its supply network and provide liquidity, but
the firm's union has protested against the deal and said it will
fight back against the sale.
    Ryu Gwan-joong, a union spokesman, said workers were
considering launching strikes, including a possible partial
walkout on March 9.
    Despite the news, Kumho Tire's shares fell nearly 10 percent
on Monday while Doublestar slid 2.4 percent.
($1 = 1,081.8000 won)

 (Reporting by Adam Jourdan in SHANGHAI; Additional reporting by
Ju-min Park in SEOUL
Editing by Stephen Coates and Kim Coghill)
 ((adam.jourdan@thomsonreuters.com; +86 21 6104 1778; Reuters
Messaging: adam.jourdan.thomsonreuters.com@reuters.net))