Cooper Tire hearing on China joint venture dissolution postponed

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According to Bloomberg, a Chinese court has pushed back a hearing on Cooper Tire’s joint venture with a Chinese tire maker to an undetermined date. 

In July, the Chengshan Group moved to dissolve its joint venture with Cooper, which has a 65 percent stake. A jointly run plant in Rongsheng, China, called Cooper Chengshan (Shandong) Tire Co. was founded in 2006.

The 5,000 Chinese workers there since mid-July have refused to make Cooper-branded tires to protest Cooper’s impending acquisition by India-based Apollo Tyres. The Chinese don’t think the  $2.5 billion deal is a good one, and they’ve expressed their doubts about the deal. They also cite cultural differences.

From Bloomberg:

Apollo is planning to fund the purchase partly through a $1.875 billion sale of high-yield bonds issued by Cooper. The timing of the bond sale will be determined this week, Apollo CFO Sunam Sarkar said yesterday.

The venture earned $106.5 million in pretax profit in 2012, according to its union. By comparison, Cooper’s pretax income almost tripled to $368 million last year.

Written by Dennis Seid

September 12, 2013 at 10:56 am