Michelin & Cie., the world’s second-largest tiremaker, signed a joint venture agreement in China to produce car and light-truck tires with Double Coin Holdings Ltd. (600623)
Michelin, which currently has four Chinese plants, will take a 40 percent stake in a factory under construction to produce tires under Double Coin’s Warrior brand, the French tiremaker said in a statement.
Financial terms are still being negotiated for the deal, which would add annual production capacity of 15 million tires, spokesman Fabrice Lenica said by telephone.
Michelin, which ranks behind Bridgestone Corp. in global production, raised 1.2 billion euros ($1.7 billion) in a share issue last September and pledged to add plants in emerging markets averaging annual growth of 9 percent. The Clermont- Ferrand, France-based company wants to add low-cost Asian operations to power its expansion, Managing Partner Jean- Dominique Senard said after he was named Feb. 11 to succeed Chief Executive Officer Michel Rollier.
Michelin already manufactures Warrior tires under license from Double Coin, a unit of Shanghai Huayi Group Co., and in 2009 bought out the Chinese partner’s minority stake in its Shanghai production facilities.
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