The 2017 sale of Kumho Tire Co. appears to be reaching critical mass.

Last year, some of the company’s creditors, including the Korean Development Bank, let it be known they were planning to sell their shares in the Korean tire maker. Since then, a number of sources have name-dropped potential suitors.

“The Nikkei Asian Review” reported three Chinese companies were competing for Kumho: Qingdao Doublestar Tire Industrial Co. Ltd., Shanghai Aerospace Industry and Jiangsu GPRO Group.

The publication also has mentioned India’s Apollo Tyres Ltd. and Japan’s Yokohama Rubber Co. Ltd. as interested parties. (In 2013, Yokohama and Kumho signed a memorandum of understanding to share resources and “jointly pursue research and development of tire-related technologies to compete with the Big 3.”)

The “Korea Herald” quoted someone “with direct knowledge of the deal” as saying one Indian company and four Chinese firms had submitted preliminary bids.

Nick Mitchell, senior vice president of research for Northcoast Research Holdings LLC, speculated that Continental AG, which is exploring acquisitions, might also be interested in Kumho.

On Tuesday, Jan. 17, Qingdao Doublestar Tire Industrial Co. Ltd. was singled out as the preferred bidder by the company hired to advise the creditors on the sale, Credit Suisse Group AG. Bloomberg L.P.’s news service corroborates Nikkei’s claim that the amount tendered for a close to 40% stake in the company is about 1 trillion won ($857 billion).

Adding another wrinkle to the bidding is the right of first refusal owned by Kumho Asiana Group Chairman Sam-koo Park. That gives him the chance to outbid the highest bidder.

(Last year, Kumho provided an official statement to MTD that assumed Park would buy the shares: "Since the Kumho Asiana Group will purchase the shares being sold, there will be no effect on Kumho USA and its operations.")

The “Korean Herald” reported Park is interested in owning Kumho Tire, although in the story, he “did not elaborate on how he will finance the deal.”

That means he could partner with another company to buy the shares. We will know more the week of Jan. 22.

Author

Bob Ulrich
Bob Ulrich

Editor, Retired

Editor Bob Ulrich has earned a reputation as an industry expert thanks to his insightful, in-depth articles and blogs on the tire industry. Before joining Modern Tire Dealer in 1985, Bob earned a B.A. in English literature from Ohio Northern University. Also, he graduated from the University of Akron School of Law with a J.D.

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Editor Bob Ulrich has earned a reputation as an industry expert thanks to his insightful, in-depth articles and blogs on the tire industry. Before joining Modern Tire Dealer in 1985, Bob earned a B.A. in English literature from Ohio Northern University. Also, he graduated from the University of Akron School of Law with a J.D.

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