FINDLAY, Ohio--(BUSINESS WIRE)--Cooper Tire & Rubber Company (NYSE: CTB) today reported the results of the valuation of Cooper Chengshan (Shandong) Tire Company Ltd (CCT), which 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. The valuation, which is the option price, was determined to be RMB 2.722 billion or approximately US $440 million at the current exchange rate.
Under the option agreement announced August 15, 2014 between Cooper and Chengshan Group Company Ltd., upon delivery of the valuation, Chengshan has the first option to elect, within 45 days, to purchase Cooper’s 65 percent interest in CCT for 65 percent of the option price, 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 determines not to exercise either the put or call option, Cooper has the right to purchase Chengshan’s 35 percent interest in CCT for 35 percent of the option price. In the event that neither party elects to purchase the other’s interest in CCT, the option agreement provides that the joint venture will continue as currently structured. Further, should Chengshan purchase Cooper’s stake in the joint venture, Cooper will continue to have offtake rights with CCT agreeing to produce Cooper-brand products, including truck and bus radial tires, for a minimum of three years.
“We look forward to final resolution of the ownership of CCT as Cooper continues to pursue our growth plans for China,” said Chairman, Chief Executive Officer and President Roy Armes. “Regardless of who owns CCT, Cooper is committed to continuing to build on the strong foundation we have in place in China by expanding our brand awareness and distribution network, and by growing profitable sales in the region through the original equipment channel and replacement tire market,” Armes added.
Forward Looking Statements
This release contains what Cooper believes are “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995, regarding expectations or matters that the Company anticipates may happen with respect to the ultimate outcome of the transactions contemplated by the January 29, 2014 agreement regarding CCT ownership, which involve uncertainty and risk. Such “forward-looking statements” are generally, though not always, preceded by words such as “expects,” “will,” “intends” and similar terms that connote a view to the future and are not merely recitations of historical fact. Such statements are made solely on the basis of Cooper’s current views and perceptions of future events, and there can be no assurance that such statements will prove to be true. It is possible that actual events may differ materially from those expectations due to a variety of factors, including but not limited to: Chengshan’s decision to exercise its options under the option agreement; changes in the Company’s relationship with Chengshan, including changes resulting from the January agreement and the option agreement; changes in economic and business conditions in the world; changes to tariffs or the imposition of new tariffs or trade restrictions; volatility in the capital and financial markets or changes to the credit markets and/or access to those markets; changes in interest or foreign exchange rates; the risks associated with doing business outside of the United States; the impact of labor problems, including labor disruptions at Cooper, its joint ventures, including CCT, or at one or more of its large customers or suppliers; and the ability to sustain operations at CCT, including obtaining financial and other operational data of CCT. It is not possible to foresee or identify all such factors. Any forward-looking statements in this release are based on certain assumptions and analyses made by Cooper in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Investors are cautioned that any such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. Cooper makes no commitment to update any forward-looking statement included herein or to disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement. Further information covering issues that could materially affect financial performance is contained in Cooper’s periodic filings with the U.S. Securities and Exchange Commission.
About Cooper Tire & Rubber Company
Cooper Tire & Rubber Company (NYSE: CTB) is the parent company of a global family of companies that specialize in the design, manufacture, marketing, and sales of passenger car and light truck tires. Cooper has joint ventures, affiliates and subsidiaries that also specialize in medium truck, motorcycle and racing tires. Cooper's headquarters is in Findlay, Ohio, with manufacturing, sales, distribution, technical and design facilities within its family of companies located in 11 countries around the world. For more information on Cooper, visit www.coopertire.com, www.facebook.com/coopertire or www.twitter.com/coopertire.