Chinese tire-maker Qingdao Doublestar has to wait for close to a month to get an approval from the South Korean Defense Acquisition Program Administration (DAPA) to take over its rival Kumho Tire Co., in $857 million deal.
"It will take three to four weeks for the DAPA to review the deal first. After DAPA completes the review, we will consult with DAPA to decide on whether to approve the deal or not," a Ministry of Trade, Industry and Energy official was quoted as saying by Yonhap Thursday.
Kumho Tire is regarded as a defense industry-related company since it supplies tires for trucks and fighter jets in the country's military. But it earns only 0.2 percent, or about 7.5 billion won (US$ 6.5 million), of its overall sales, by supplying tires to the military, according to the company.
The Kumho Tire creditors are in the final process to wrap up the deal, which includes the rights to the brand name of Kumho Tire and the rollover of the tiremaker's maturing debts.
The deal, if approved, will make Doublestar China's biggest tiremaker.
As of July, the company has a global capacity of 55 million units in eight plants -- three in South Korea and five in the United States, China and Vietnam.