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The Korea Herald
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THE INVESTOR
March 29, 2024

Automobiles

Erae CS denies bidding for Kumho Tire acquisition

  • PUBLISHED :December 21, 2016 - 16:46
  • UPDATED :December 21, 2016 - 16:46
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[THE INVESTOR] South Korean midsized auto parts maker Erae CS on Dec. 21 denied recent reports that it has partnered with China’s Shanghai Aerospace Industry to acquire a controlling stake in Kumho Tire.

“The report is not true,” an Erae CS official told The Investor. “We are not participating in the Kumho bid.”




Earlier, South Korean media outlet Etoday reported that the Chinese aerospace and automotive firm SAI has formed a consortium with Erae CS and another Chinese auto parts maker to enter the preliminary bid of Kumho Tire. The report said the tie-up would raise SAI’s chances of winning the deal and strengthen its foothold in Korea. Officials from the firm are expected to visit Kumho Tire’s China plant this week.

According to sources, the Chinese company submitted the highest bid of 990 billion won (US$828.69) for a 43 percent stake in Kumho Tire in the preliminary round to become the strongest contender among five of the shortlisted firms that include Qingdao Doublestar, Jiangsu GPRO Group and Linglong Group. From India, Apollo Tyre placed a bid. The final round of bidding is expected to take place in January next year.

Kumho Asiana Group Chairman Park Sam-koo, however, is widely expected to exercise his rights to purchase the stake under the same term as the highest bidder. The Kumho chief has been looking to repurchase the tire-making unit since the firm was put under control of creditors in 2010 due to a liquidity crisis.

Erae CS, headquartered in Gimhae, South Gyeongsang Province, manufacturers vehicle frames and steering systems. Its clients include GM Korea. The firm has grown rapidly in recent years, expanding its global portfolio. In 2015 it acquired Delphi Korea, a large auto parts company under US-based Delphi, and changed the name of the firm to Erae Automotive System. 

By Ahn Sung-mi (sahn@heraldcorp.com)

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