The case is as much noise as if Italy, France, Michelin was bought by the Chinese. The tire manufacturer Pirelli , the exclusive supplier of Formula 1 and famous for its charming calendars, will go under the Chinese group control ChemChina. The principal shareholder of Pirelli, the holding Camfin, owned equally by the Russian oil company Rosneft and the CEO of Pirelli, Marco Tronchetti Provera , has signed an agreement to this effect Sunday evening.
An operation in three stages
Presented as a “long-term industrial partnership”, the transfer will be done in three stages. The share of 26.2% held by Camfin Pirelli will first be converted into a new company, BidCo, including NRC, a subsidiary of ChemChina will control . The transaction will be priced at 15 euros per share Pirelli, valuing the Italian group around 7 billion euros. After this first phase, to be completed by the end of summer, the Russian investment company Long Term Investments Luxembourg will enter the agreement between shareholders.
Finally, the new Bidco will launch a public transaction of purchase at a price of 15 euros per share on other Pirelli shares, currently listed on the Milan Stock Exchange in to a “potential withdrawal of the Stock Exchange.” Currently other major direct shareholders of Pirelli are Malacalza Investimenti (7%), the Benetton family (4.6%) and Mediobanca (4.1%).
Concerns in Italy
“The seat and expertise Pirelli will continue in Italy,” the statement said the group announcing the transaction. But their possible displacement also not ruled out. It will require only “enhanced majority”, the press suggesting 80% of votes. Many voices are indeed worried during the weekend of the health and the future of capitalism Italian.
“The partnership with a global player like ChemChina represents a great opportunity for Pirelli. The NRC’s approach to business matters and strategic vision ensures the development and stability of Pirelli,” said M . Tronchetti, the current CEO of Pirelli that should retain the post of CEO, while a new chairman will be appointed by NRC.
In case of success of the operation, it would be one of the largest transactions of this type between Italy and China. In July 2014, China had already invested 2.1 billion euros in a business Italian energy infrastructure, and about twenty contracts worth more than EUR 8 billion were signed during the visit in October Chinese Premier Li Keqiang.
Towards a demerger of Pirelli?
In the longer term, the agreement envisages a “reorganization of Pirelli and the sharing of its industrial division with some NRC strategic assets. ” It could be to split Pirelli, which would focus on high-end tires, more lucrative, while activity industrial tires would be consolidated with Chinese assets.
ChemChina -précédemment known as China National Chemical Corp.- is at the head of assets valued at 272.5 billion yuan (41 billion euros) for a turnover of 244 billion yuan (36.7 billion) in 2013, according to its website.
Born in 1872 in Milan, Pirelli began by producing bicycle tires before engaging in the emerging automotive industry, including competition, to the current tires Formula 1. In 2014, the group recorded a turnover of € 6 billion and generated an operating profit of 838 million euros (+ 6.8%).
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