The partnership agreement between Groupe Michelin and Hankook Tire Co. Ltd., signed yesterday (see "Michelin intends to buy 10% stake in Hankook") "is intended to generate value for both companies and their customers as well as to support their respective growth in the coming years," according to Michelin.
The agreement, signed by Hankook Tire CEO and President Choong Hwan Cho and Michelin Asia-Pacific President Jean-Marc François, will make Michelin a shareholder in Hankook.
Following several months of discussions, Hankook and Michelin expect to co-operate in research and development, manufacturing and distribution of their respective products in certain markets. Under the partnership:
* Michelin will license its PAX run-flat system technology to Hankook.
* Hankook will produce tires for Michelin.
Both companies will continue to define the precise scope and terms of the specific joint programs identified during the preliminary discussions. The programs will be implemented in specific phases.
François, who is also a member of Michelin’s Group Executive Council, says the dynamic partnership with Hankook Tire was yet another step in Michelin’s development plans for Asia (Michelin's Asia-Pacific regional headquarters are located in Singapore). Cho says the partnership with Michelin will play an important role in Hankook's growth.
Both executives agreed that "Hankook and Michelin share many perspectives which we believe constitute a strong foundation for our partnership. This will allow us to explore opportunities and to jointly develop our co-operation in the spirit of mutual respect, understanding and benefit."
Hankook's stock price, adjusted for the exchange rate, was selling for $2.35 a share earlier today, up 6% from yesterday and 12% from its closing price on Jan. 24.
