ChemChina reaches deal to buy Pirelli for EUR7.1 billion

Article by Christian A., on March 24, 2015

China National Chemical Corporation has reached an agreement to acquire Italian tire maker Pirelli for EUR7.1 billion ($7.7 billion). The acquisition will provide ChemChina access to technology to produce premium tires that can be sold at higher margins. It will also provide Pirelli a larger presence in the Chinese market.

According to the agreement, ChemChina's tire making unit -- China National Tire & Rubber -- will first purchase the 26.2-percent stake owned by Camfin and then launch a mandatory takeover bid for the rest.

The takeover bid will be launched by a medium controlled by the ChemChina and partly owned by Camfin investors including Pirelli chief Marco Tronchetti Provera, Italian banks UniCredit and Intesa Sanpaolo, and Rosneft.

The offer will start at EUR15 per share, which values Pirelli at EUR7.1 billion, excluding net debt of almost EUR1 billion at the end of 2014. The news of the deal and its details resulted to Pirelli’s shares to surge to a 25-year high and to top the EUR15 buyout price.

Such surge has prompted analysts to say that shareholders may want to think twice before offering their shares at that level. Sources privy with the matter told Reuters that the deal will mean Rosneft would its see stake reduced in Pirelli.

According to Camfin, Pirelli's less profitable truck and industrial tire business would be folded into ChemChina's listed unit AEOLUS. ChemChina will select a new chairman, although Tronchetti Provera will remain as chief executive of Pirelli.

Topics: pirelli

If you liked the article, share on:

Comments

Recommended

During car crashes and accidents, there are times that its occupants can’t get out easily. There are times when the only way to get out of that situation is to...
by - February 23, 2017
Could this be a special version of Ferrari’s much acclaimed LaFerrari? No matter how we look at it, the patent images for this sports car from Ferrari indicate its striking...
by - February 23, 2017
How fast can a 2017 Chevrolet Camaro ZL1 actually go? Considering the amount of power lurking underneath its line-laden bonnet, the 2017 Camaro ZL1 is capable of achieving a top...
by - February 23, 2017
As it turned out, we’ll be seeing Toyota’s new super supermini at the 2017 Geneva Motor Show in March. It’s time we all get to meet the new Toyota Yaris...
by - February 23, 2017
Opel revealed it has sweetened the pot for 2017 Insignia Grand Sport customers with the Opel Exclusive program. Through this program, the brand hopes to introduce a wide selection of...
by - February 22, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries