Qingdao Double Star's merger with Kumho Tire receives registration approval from the CSRC

From: Xinhua Finance

Xinhua Finance, Beijing, March 26 - The Qingdao Double Star’s restructuring project for Kumho Tire received approval for registration from the China Securities Regulatory Commission on March 26. This marks the first case of a listed company in China’s tire industry acquiring and restructuring another listed company, and also the first case of a listed company in this industry acquiring and restructuring an overseas listed company. This key development signifies that the restructuring project is about to enter a new implementation cycle. It represents not only a deep integration of capital but also a potential reconstruction of value that could reshape the global tire industry landscape.

According to the previously disclosed plan, Qingdao Double Star will purchase 45% of Kumho Tire’s shares through issuing shares and cash payments, making Kumho Tire a listed subsidiary controlled by Qingdao Double Star. Upon completion of the transaction, it will not only resolve the previously promised issue of competition within the same industry, safeguard the interests of the listed company and minority shareholders, and enhance Qingdao Double Star’s profitability, but also inject stronger momentum into the development of both parties through deep collaboration in strategic planning, product planning, capacity layout, and market promotion, creating a globally leading tire enterprise and further enhancing China’s influence in the international tire market.

As a globally renowned tire enterprise, Kumho Tire has established nine production bases and five R&D centers worldwide, with its products, including low rolling resistance tires, airless tires, and smart tires, being at the leading level globally. By 2025, Kumho Tire’s revenue is projected to grow 1.2 times compared to 2020, with total profit increasing 6.3 times, achieving over 1 trillion Korean won in sales for nine consecutive quarters. Among these, revenue in the European market is expected to grow 2.8 times, the U.S. market by 1.7 times, and the revenue in China’s OE market by over 1 time, maintaining a growth momentum centered around North America, Europe, and China.

This restructuring will further amplify the complementary and synergistic effects between Double Star Tire and Kumho Tire. Kumho Tire has strong brand recognition and a robust sales network internationally, being one of the main suppliers to leading international brands such as Mercedes-Benz, BMW, Volkswagen, Audi, General Motors, Nissan, and Hyundai, as well as famous domestic car manufacturers. Kumho Tire’s strength lies in passenger car tires, while Double Star Tire excels in truck and bus tires. By leveraging strategic synergy and complementary advantages, both parties will integrate global resources, enhance R&D capabilities, and proactively plan future strategic products, driving high-quality development for both and accelerating the creation of a world-class enterprise.

This is not only a restructuring integration between listed tire companies but also a further implementation of the central government’s deepening reforms of state-owned enterprises and the State-owned Assets Supervision and Administration Commission’s focus on core responsibilities, professional integration, and the China Securities Regulatory Commission’s promotion of high-quality development for listed companies, providing a practical template for state-owned assets and enterprises to utilize capital market tools for professional integration and overseas mergers and acquisitions.

Editor: Luo Hao