MILAN, Italy (June 2)—Pirelli & C. S.p.A. has agreed to sell its Energy & Telecom Cables & Systems business to Goldman Sachs Capital Partners for nearly $1.6 billion and will invest the proceeds in "strategic activities," including its tires, telecommunications and real estate operations.
The business being sold generated pretax earnings of $136.6 million on sales of $3.99 billion in 2004 with 12,000 employees and 52 plants globally.
Upon completion of the transaction, Pirelli's net financial position will be improved by about $1.5 billion, including nearly $600 million more equity value and about $840 million in reduced debt.
Pirelli said other businesses that will benefit from the proceeds are its activities in the field of broadband and second generation photonics managed by Pirelli BroadBand Solutions and based upon Pirelli Labs' innovations and in the environmental field.