MILAN—Marco Polo Industrial Holding S.p.A., a company indirectly controlled by China National Chemical Corp. (ChemChina) through China National Tire & Rubber Co. Ltd., has received approval from Consob regarding its mandatory tender offer and voluntary tender offer launched to purchase the ordinary shares of Pirelli & C. S.p.A.
Marco Polo said in a news release that both offers are equal to the original purchase price of Pirelli, which is 15 Euros per share. ChemChina said in its initial offer sheet that if all shares are tendered at that price, the deal would be worth $6.35 billion.
The release said the period for the offers began Sept. 9 at 2:30 a.m. (8:30 a.m. Italian time) and will end Oct. 13 at 9:30 a.m. (5:30 p.m. Italian time).
If successful, ChemChina potentially would take Pirelli private. Regardless, the Italian tire maker will be integrated into ChemChina's China National Tire & Rubber Co. subsidiary.
ChemChina already has secured about 30 percent of Pirelli through two earlier deals. The first was for Camfin S.p.A.'s 26.2 percent stake, establishing the price at 15 Euros per share—which at the time translated to $16.25 per share and valued the Italian tire maker at $7.7 billion—in a transaction that closed on Aug. 11. Camfin's shares transferred to Marco Polo Industrial Holding (Bidco), a newly incorporated Italian company, and Camfin reinvested in Marco Polo International Italy S.p.A., a company that controls Bidco.
In April, ChemChina reached an agreement to acquire Edizione s.r.l.'s stake in Pirelli for the same price of $16.25 per share. ChemChina said the transfer of Edizione's Pirelli shares to Bidco comes with the condition that Camfin has sold its shares to Bidco.
Edizione also may decide to postpone the transfer of its direct Pirelli stake to Bidco by accepting the mandatory tender offer.
CNRC said Edizione has the right to terminate the share purchase agreement in the event of the launch of one or more competitive tender offers by third parties in respect of the Pirelli ordinary shares, unless Bidco announces an increase of the price of its offer to at least the same price as the last competitive offer.
ChemChina reported sales of $39.4 billion in 2013 and is considered China's largest chemical company. According to its website, it operates in six sectors: new chemical materials, basic chemical materials, oil processing, agrochemicals, rubber products and chemical equipment.
CNRC says it's China's largest producer of off-the-road tires with Aeolus Tyre Co., ChemChina Guilin Tire Co. Ltd., Double Happiness Tire Industrial Co. Ltd. and Qingdao Yellowsea Rubber Co. Ltd. among its holdings.
Pirelli is the fifth largest tire maker in the world, according to Rubber & Plastics News' 2015 Global Tire Report, and it reported 2014 sales of about $7.99 billion.