According to Korean media, Qingdao Doublestar Co. is in its final stages of the majority share purchase of Kumho Tire Co.
The China-based tiremaker recently submitted documents for the Korean government’s approval of the approximately $857 million deal. Additionally, Kumho Tire creditors are reportedly in the final process to wrap up the deal, which includes the rights to the brand name of Kumho Tire and the rollover of the tiremaker’s maturing debts.
Doublestar contacted the Ministry of Trade, Industry and Energy to review its planned purchase of the Korean tiremaker and approve the deal, media reports.
“It will take three to four weeks for the Defense Acquisition Program Administration (DAPA) to review the deal first. After DAPA completes the review, we will consult with DAPA to decide on whether to approve the deal or not,” an official said.
The ministry is also expected to review the deal to see if there is any possible impact on the local tire industry.
Kumho Tire is a defense industry-related company since it supplies tires for trucks and fighter jets in the Korean military.
A deal between creditors of Kumho Tire and Doublestar was signed in March for the majority 42.01%, stake in Kumho Tire Co.
Ongoing disputes over the sale of Kumho to Doublestar ensued over the following months; including urging from government officials not to sell the business to China, the threat of legal action from Park Sam-koo, chairman of Kumho Asiana Group, and arguments over the use of the Kumho Tire trademark. Kumho executives have also threatened resignation if the company is sold.