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SEOUL, Jan 28 (Reuters) - Global tyre maker Michelin said on Tuesday it would buy a 10 percent stake in South Korea's Hankook Tire for a strategic alliance.
Hankook is one of the largest tyre makers in South Korea, which ranks as the world's fifth-largest producer of automobiles behind the United States, Japan, Germany and France.
Top executives of the two companies signed a partnership agreement in Seoul on Tuesday to cooperate in research and development, manufacturing and distribution, the French tyre maker said in a statement.
"This agreement allows the two companies to exploit synergies in a search for common opportunities to develop their respective positions in the tyre market," the statement said.
Shares of Hankook Tire shot up 5.7 percent to 2,590 won in late trade on the news, outperforming a 0.79 percent gain in the broader market .
Hankook would also be licensed to produce Michelin's PAX-run-flat tyre technology as part of the agreement, it said.
Michelin said the two sides would continue to discuss the precise scope and terms of the alliance.