China National Chemical Unit Nears Deal for Tire Maker Pirelli
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Version 0 of 1. A subsidiary of China National Chemical Corporation will 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 deal, Camfin will sell its 26.2 percent stake in Pirelli to China National Tire and Rubber Company, or C.N.R.C., for 15 euros a share, which values Pirelli at 7.1 billion euros, or about $7.7 billion. Camfin’s owners then will form an industrial partnership with China National Tire and Rubber and will reinvest part of the sale proceeds into a new Italian company, which will hold the Pirelli stake and initiate a takeover bid for all of Pirelli’s outstanding stock, offering €15 a share. Shares of Pirelli closed up 2.2 percent at €15.23 in trading in Milan on Friday. China National Tire and Rubber will control the new company, while the Camfin investors will 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,” Ren Jianxin, chairman of China National Chemical Corporation, said in a news release. Camfin first confirmed on Friday 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 Marco Tronchetti Provera, the chairman and chief executive of Pirelli, 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 will exit its ownership in Camfin and receive a direct stake in the newly formed Italian company, which will hold Camfin’s former stake in Pirelli. If successful in its takeover bid, China National Tire and Rubber will 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 Company, doubling the volume of the business and expanding Pirelli’s business in Asia. China National Tire and Rubber also will choose a new leader of the board for Pirelli, and Mr. Tronchetti Provera will remain chief executive of the reorganized Pirelli, which will continue to be based in Italy. Mr. Tronchetti Provera will 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.” The transaction is subject to regulatory approval and is expected to close this summer. JPMorgan Chase has agreed to provide financing for the Pirelli acquisition. China National Tire & Rubber’s “approach to business and strategic vision guarantee Pirelli’s development and stability,” Mr. Tronchetti Provera said in a news release. China National Tire and Rubber was advised by Rothschild, ChemChina Finance Corporation and J.P. Morgan and the law firms Pedersoli e Associati Studio Legale, Clifford Chance and Jun He. Lazard and the law firms Chiomenti and Lombardi Molinari Segni advised Camfin, while Ligerion and the law firm Linklaters advised the Rosneft investment vehicle. |