China-based Doublestar Tyre Co.’s plan to take majority share of Kumho Tire Co. may be in jeopardy, according to Korean media. Kumho Asiana Group could block the Chinese tiremaker from using the Kumho brand logo, which is owned by Kumho Industrial Group.
Members of the Kumho Asiana Group are strongly against the current terms discussed between the creditors of Kumho Tire and Doublestar that allow the Chinese company to use the Kumho trademark for up to 20 years after acquisition without Kumho Industrial’s permission. If Kumho Asiana disallows Doublestar to use the Kumho trademark, the deal may fall apart, according to Korean media.
Chairman of Kumho Asiana Group Park Sam-Koo made an effort to regain control of Kumho Tire, but was unable to seal the deal when he was denied the chance to form a consortium to buy back the tiremaker. Park may be unwilling to let the Kumho trademark go, because if the deal falls apart he will have another chance to bring Kumho Tire back under his control, media said.
Doublestar and Kumho Tire creditors have six months to complete the 955 billion won ($831 million) deal. However, if Doublestar does not purchase the controlling stake within six months, the company will lose its preferred bidder status, giving Park a new pre-emptive right to buy Kumho Tire shares.