Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
  • Tire Business
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Rubber Division IEC
    • War in Ukraine
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • ITEC
    • Silicone
    • Online Exclusive
    • Latex
    • Technical Notebooks
    • Executive Action
    • Government/Legal
    • Opinion
    • Blogs
    • Sustainability
    • Products
    • Wacky World of Rubber
  • Airless Tires
  • Custom
    • Sponsored Content
    • White Papers
  • Resources
    • Directory
    • Classifieds & Mold Mart
  • Data
  • Events
    • RN Events
    • RN Livestreams/Webinars
    • Industry Events
    • Past Events
    • Rubber News M&A Live
    • Ask the Expert
    • Healthcare Elastomers Conference
    • Rubber In Automotive Conference
    • Women Breaking the Mold Networking Forum
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
April 16, 2015 02:00 AM

Editorial: Road to Pirelli takeover might prove to be bumpy

Rubber & Plastics News Report
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    The latest potential mega-deal in the tire industry has been hatched, but it will take some time for the full impact to play itself out.

    The deal involves Pirelli, the world's No. 5 tire producer, and state-owned China National Chemical Corp. The first part of the deal has ChemChina—as the Chinese firm is known—buying the 26.2 percent share of Pirelli now owned by investment firm Cam Finanziaria S.p.A, or Camfin, for about $2 billion.

    Eventually, ChemChina, owner of China National Tire & Rubber Co., wants to be the majority owner of the Italian tire maker and its iconic brand.

    But that's putting the transaction in simple terms, though simple is hardly a term that describes everything that must fall in place for that to happen.

    For starters, Camfin—Pirelli's current largest shareholder—is controlled by Marco Tronchetti Provera, who also happens to be Pirelli's chairman and CEO.

    Analysts say odds are the initial transfer of ChemChina's share will win antitrust and regulatory approvals and may close this summer.

    ChemChina then would launch a mandatory tender offer for the majority of Pirelli shares, and possibly take the tire firm private at that point. The Chinese firm said Tronchetti Provera would stay on as CEO—it would name its own chairman—and oversee the restructuring. Camfin also would keep a minority stake in Pirelli through re-investing part of its proceeds and partner with ChemChina in its bid.

    There is a lot that would make sense out of such a partnership, particularly on the consumer tire side, according to one analyst. ChemChina, would get instant access to technology along with a top tier brand and access to original equipment customers around the globe.

    Pirelli, conversely, would get a stronger partner in China. Its brand would be the combined firm's flagship, along with a stable of lower-tier brands to service the rest of the market.

    But while many deals look great on paper, there's often a catch. Just ask Cooper Tire and Apollo about that.

    Here, the problem, according to the analyst, may be in getting the necessary stake of Pirelli needed to take the Italian company private.

    Another potential roadblock is the price that ChemChina has settled on. While it said the 15 Euros a share offer is a large premium over what Pirelli had been trading for in recent months, at the time the deal was announced the share price already had exceeded that number.

    So if ChemChina is serious about its long-range plans, a larger offer may have to be forthcoming. Otherwise, the rest of the deal may never take off.

    Related Articles
    ContiTech gets all it hoped for with Veyance purchase
    Room for all sizes in N.A. custom mixing industry
    Toyo's reality for N.A. region likely exceeds blueprint
    Small rubber shops remain heart, soul of rubber industry
    Details of the Pirelli deal
    Pirelli, Rosneft sign SR research partner
    DeLapa a good choice to break division barrier
    Jaguar selects Pirelli tire as OE fitment
    Selling quality not always an easy proposition
    Rosneft to acquire stake in ChemChina
    Letter
    to the
    Editor

    Rubber News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    Most Popular
    1
    3M to exit manufacturing of PFAS by end of 2025
    2
    Pros and Cons: A look at 4 emerging sustainable carbon black methods
    3
    Illinois attorney general sues 14 firms over PFAS contamination
    4
    No alternative in sight: Why Michelin is emphasizing sustainability of hevea
    5
    Teknor Apex uses 'world's first' bio-based plastic substitute in new TPE
    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Rubber Division IEC
      • War in Ukraine
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • ITEC
      • Silicone
      • Online Exclusive
      • Latex
      • Technical Notebooks
      • Executive Action
      • Government/Legal
      • Opinion
      • Blogs
        • Products
        • Wacky World of Rubber
      • Sustainability
    • Airless Tires
    • Custom
      • Sponsored Content
      • White Papers
    • Resources
      • Directory
      • Classifieds & Mold Mart
    • Data
    • Events
      • RN Events
        • Healthcare Elastomers Conference
        • Rubber In Automotive Conference
        • Women Breaking the Mold Networking Forum
      • RN Livestreams/Webinars
      • Industry Events
      • Past Events
      • Rubber News M&A Live
      • Ask the Expert
    • Advertise
    • DIGITAL EDITION