US tire maker Cooper, who you might recall almost met with disaster face to face in an aborted merger with India’s Apollo Tyres, has now announced it signed a deal with its joint venture partner from China.
Maybe you would treat this news lightly, but the interesting fact is that before this deal, the workers at Cooper Chengshan Tire (CCT), the aforementioned joint venture between Cooper and China’s Chengshan Group, actually seized control of the factory, stopped production and even threw out the Cooper management when they heard the news about the Apollo deal.
Now, the US company targets the end of this peculiar dispute, that robbed it of control of a joint venture that helped the company achieve roughly 25 % of its global revenue. More so, this dispute was one of the key factors that caused problems with the Apollo deal, as it prevented the Americans from providing either third-quarter or fourth-quarter results.
“With this agreement, Cooper gains certainty regarding sustained normal operations at CCT as well as a defined process for determining the long-term ownership of the joint venture based on a fair market value,” Roy Armes, chief executive, said.
Now, under the signed agreement, an independent arbiter is allowed to evaluate the value of CCT (although it’s capped at $435 million) and offers to the Chinese (Chengshan Group) the right to buy out Cooper’s 65 % stake or to Cooper to take over the 35 % from the local partner.
Via Financial Times