The latest agreement with Chengshan Group and CCT labour union also throws up opportunities for Cooper Tire to enter into acquisitions.
The pact establishes a process for determining the future ownership of CCT, which begins with engaging an independent valuation firm to determine its fair market value.
Cooper Chengshan (Shandong) Tire Company Ltd (CCT) is the joint venture.
"Once a valuation is established, Chengshan will have the first option to either purchase Cooper's 65 per cent interest or to sell its 35 per cent interest to Cooper, making CCT a wholly-owned subsidiary of Cooper," Cooper Tire & Rubber Company said in a statement.
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In December last year, Cooper Tire had terminated its merger agreement with Apollo Tyres.
"If Cooper sells its interest in CCT to Chengshan, the commercial offtake rights secure a future supply of product for our customers. Cooper will also have added flexibility to enter into acquisitions...," Cooper Tire Chairman, Chief Executive Officer and President Roy Armes said.
In October, Cooper had approached Delaware Court of Chancery to push for completion of merger with Apollo Tyres. At that time, the American entity had alleged that the Indian firm was seeking to delay an agreement with USW -- the union that represented Cooper employees at facilities in Findlay, Ohio, and Texarkana, Arkansas.
However it had sought reduction in price of the USD 2.5 billion deal citing problems related to the US firm's China operations and concessions to the workers union, but these were rejected by Cooper.
Following the issues, the deal -- which was first announced in June 2013 -- was finally shelved in December the same year.