MILAN, Italy (March 12, 2008) — Pirelli & C. S.p.A. is repurchasing a 38.9-percent share of Pirelli Tyre S.p.A. that it sold to a consortium of banks in August 2006 for $1.28 billion.
Pirelli will pay $664.6 million in cash and assume $613.7 million in debt to acquire the stake. This represents a premium of nearly 13 percent over the value of the stake 20 months ago when it was sold.
Pirelli said the move is part of its strategy to refocus on its core businesses following the sale of its telecom holding company Olimpia S.p.A. last October. That sale again made the tire sector Pirelli's dominant business, accounting for about 80 percent of sales and nearly all its earnings.
Pirelli is expected to take ownership of slightly more than half the shares March 12, with the remaining 19.2 percent interest expected to transfer in July.