Cooper Tire Reaches Deal to End China Venture

Cooper Tire & Rubber Co. and Chengshan Group Co. Ltd. have agreed to end their troubled tiremaking joint venture in China, the Financial Times reports.

The deal aims to resolve a dispute over control of eight-year-old Cooper Chengshan Tire Co., a company that is owned 65% by Cooper and 35% by Chengshan.

When Cooper announced last summer it planned to sell itself to India's Apollo Tyres Ltd. for $2.5 billion, workers at the China venture seized the factory, ejected Cooper's senior managers and stopped making Cooper-brand tires. The lockout was a major factor in the collapse of the sale.

Under the plan to disband the venture, an independent arbiter will determine a value for the company of at least $435 million. Chengshan will have first option to buy out Cooper's stake or sell its holding to the American company. If Chengshan declines either option, Cooper will have the right to buy out its Chinese partner.