Cooper Tire Announces Chengshan JV Valuation At $440 Mln

(RTTNews) - Cooper Tire & Rubber Company (CTB) Tuesday reported the results of the valuation of Cooper Chengshan (Shandong) Tire Company Ltd or CCT.

The valuation, which is the option price, was determined to be 2.722 billion yuan or about $440 million at the current exchange rate.

The valuation was completed by an independent firm responsible for determining a fair market value for CCT on a stand-alone basis, excluding the value of trademarks and technologies licensed by Cooper to CCT.

Under the option agreement announced August 15, between Cooper and Chengshan Group Company Ltd., upon delivery of the valuation, Chengshan has the first option to elect, within 45 days, to buy Cooper's 65 percent interest in CCT for 65 percent of the option price.

It also has the option to sell its 35 percent interest in CCT to Cooper for 35 percent of the option price, or not to exercise either of these options.

If Chengshan decides not to exercise either the put or call option, Cooper has the right to buy Chengshan's 35 percent interest in CCT for 35 percent of the option price.

If no party elects to purchase the other's interest in CCT, the joint venture can continue as currently structured.

Further, if Chengshan buys Cooper's stake in the JV, Cooper will continue to have offtake rights, with CCT agreeing to produce Cooper-brand products, including truck and bus radial tires, for at least three years.

CTB closed up 1 percent on Tuesday at $30.33.