ChemChina reaches deal to buy Pirelli for EUR7.1 billion

Article by Christian Andrei, 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:


Login or Create new account to add a comment!


Mitsubishi is now officially part of the Renault-Nissan alliance after Nissan took over the Japanese car company recently. We know a lot has been happening in the car industry, but...
by - October 24, 2016
Driving the newest 2017 BMW 5-Series (G30), Clive Owen (Closer, Children of Men) returns to his role as “The Driver”. In this latest installment, what initially starts as a simple...
by - October 24, 2016
Many had wished that a Lamborghini Huracán Superleggera would somehow make a surprise debut at the recently held Paris Motor Show. Sadly, not a single Lamborghini appeared anywhere in sight....
by - October 24, 2016
Aston Martin and Red Bull Racing teamed up for the first time in creating what looks like one of the most ferocious beasts in history. The British car manufacturer has...
by - October 24, 2016
German premium carmaker Audi is reportedly planning to buy back around 25,000 Audi Q7 SUVs powered by its 3.0-liter V6 TDI engine in the United States. The buyback should compensate...
by - October 24, 2016