Cooper Tire & Rubber Company reported today it has signed an agreement with its partner in China, Chengshan Group Co. and its unionized workers, establishing a path forward for their joint venture, Cooper Chengshan (Shandong) Tire Company.
The agreement establishes a process for determining the future ownership of Cooper Chengshan Tire Co., which begins with engaging an independent valuation firm to determine the company’s fair market value.
Once a valuation is established, Chengshan will have the first option to either buy Cooper’s 65 percent interest or to sell its 35 percent interest to Cooper, making Cooper Chengshan a wholly-owned subsidiary of Cooper.
If Chengshan determines not to exercise either of these options, Cooper has the right under the agreement to buy Chengshan’s 35 percent interest. The options are conditioned on Cooper reporting its financial results within a specified time frame.
In the event that neither party elects to purchase the others’ interest, the agreement allows for continuation of the joint venture as currently structured.