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- Mar 8, 2024
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China National Chemical Corp (ChemChina) will buy Pirelli in a 7.1 billion Euro deal putting the 143-year-old Italian company in Chinese ownership.
ChemChina will be the majority and controlling shareholder in Pirelli, and the move is expected to boost Pirelli’s distribution in the massive Chinese tyre market, a significant advantage for Pirelli in Asia over its European competitors.
Under the deal, ChemChina’s tyre making division, China National Tyre and Rubber, will enter into a joint venture which will buy the 26.2 per cent stake in Italian holding firm Camfin owns in Pirelli. The venture will then launch a mandatory takeover bid for the rest of Pirelli.
The deal has the backing of most of Pirelli’s core investors and it is unlikely to fail or face a counterbid from a European rival such as France’s Michelin or Germany’s Continental, according to bankers who have been following the development.
Pirelli’s Italian management is expected to stay on for now, led by Pirelli boss Marco Tronchetti Provera. Russian oil company Rosneft bought a 50 per cent stake in Camfin a year ago, before the Russian economic crisis started. Rosneft is expected to remain a Pirelli investor after the buyout but it’s still not clear what its final stake will be.
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