A subsidiary of China National Chemical Corp (ChemChina, 中國化工) is set to make a takeover bid for the Italian tire maker Pirelli after agreeing on Sunday to acquire the stake of Camfin, Pirelli’s largest shareholder, the companies said.
As part of the agreement, Camfin would sell its 26.2 percent stake in Pirelli to China National Tire and Rubber Co (中國化工橡膠) for 15 euros per share, which values Pirelli at 7.1 billion euros (US$7.66 billion).
Camfin’s owners would then form an industrial partnership with China National Tire and Rubber and would reinvest part of the sale proceeds into a new Italian company, which would hold the Pirelli stake and initiate a takeover bid for all of Pirelli’s outstanding stock, offering 15 euros per share.
Photo: AFP
Pirelli shares closed up 2.2 percent at 15.23 euros in trading in Milan on Friday last week.
CONTROL
China National Tire and Rubber would control the new company, while the Camfin investors would own as much as 49.9 percent of its capital.
“We are delighted with the opportunity to team up with Mr Marco Tronchetti Provera and his team to continue to build together a world-class organization and a market leader in the global tire industry,” ChemChina chairman Ren Jianxin (任建新) said in a news release.
Camfin first confirmed on Friday last week that it was in talks with an “international industrial partner” to sell its stake in Pirelli, which is based in Milan.
Camfin’s owners include Nuove Partecipazioni, which is owned by Pirelli chairman and chief executive Marco Tronchetti Provera, and the Italian banks UniCredit and Intesa Sanpaolo.
The Russian state oil company Rosneft agreed to take a 50 percent stake in Camfin last year.
As part of the deal, Rosneft would exit its ownership in Camfin and receive a direct stake in the newly formed Italian company, which would hold Camfin’s former shareholding in Pirelli.
If successful in its takeover bid, China National Tire and Rubber would seek to delist Pirelli and reorganize the company.
It is expected to seek to integrate Pirelli’s industrial tire business with assets of China National Tire and Rubber and with the Fengshen Tires Stock Co (風神輪胎), doubling the volume of the business and expanding Pirelli’s business in Asia.
MANAGEMENT
China National Tire and Rubber would also choose a new leader of the board for Pirelli, and Pirelli chief executive officer Tronchetti Provera would remain in his position at the reorganized firm, which would continue to be based in Italy. Tronchetti Provera would have the right to choose when to relist Pirelli.
“The parties recognize the pivotal role of Pirelli’s current top management as a key factor for the ongoing success and growth of Pirelli and its business,” Camfin said in a news release. “In fact, the partnership is predicated on the continuation of Pirelli’s entrepreneurial and business culture.”
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