Kumho Industrial sells tire unit for $1.2 billion

April 22, 2003

Kumho Industrial Co. Ltd. has signed a tentative agreement to sell its Kumho Tire unit to South Korea’s Military Mutual Aid Association (MMAA) for 1.43 trillion won ($1.2 billion).

Kumho Industrial President Shin Hoon and MMAA President Kim Seung-kwang signed the tentative agreement in southern Seoul on April 18.

According to the agreement, MMAA will control 50% of Kumho Tire, with Kumho Industrial retaining a 30% stake in the business. Other investors will control the remaining 20%.

The agreement is expected to be approved in June by the MMAA’s operating committee and Kumho Industrial’s general shareholders.

Kyu S. Cho, president of Kumho Tire U.S.A. Inc., says the agreement bodes well for the future of Kumho’s tire business.

"The benefit of this agreement will be huge for Kumho Tire and Kumho Tire U.S.A.," says Cho. "This will lay the groundwork for continued growth in every aspect of our business, including capacity expansion and marketing activities."

The MMAA is an investment fund for South Korean soldiers and military staff and has 3.5 trillion won in assets.

Established in 1960, Kumho Tire is the 10th largest tire manufacturer in the world, with 2002 sales of $1.4 billion.