ChemChina to buy Pirelli
Monday, March 23, 2015
Posted by: Wes Fleming
China’s largest state-owned chemical company, ChemChina, announced it will buy a large stake in Pirelli Tyre SpA. Camfin SpA is Pirelli’s biggest shareholder and is the entity selling the shares to ChemChina, which also offered to buy Camfin’s remaining shares and may take the company private once the takeover is complete.
Camfin is controlled by the family of Pirelli chairman Marco Provera. Italian banks UniCredit and Intesa Sanpaolo own stakes in Pirelli, as does Russian industrial conglomerate Rosneft. Pirelli will be controlled by China National Tire & Rubber, a subsidiary of ChemChina. Pirelli has owned Metzeler since 1986 and is the world’s fifth-largest tire manufacturer.
ChemChina, run by chairman Ren Jianxin, is officially known as the China National Chemical Corporation and is one of China’s most major industrial entities, with manufacturing operations crossing petrochemical, oil processing, agricultural chemicals, rubber and other concerns. ChemChina bought two French companies in 2006.
According to Thomson Reuters, this purchase is China’s fifth-biggest overseas acquisition, and its first following a massive anti-corruption campaign initiated by China’s communist government. Though leaked news of the acquisition drove Pirelli shares to a 25-year high, the deal comes through at $16.40 per share, or about $7.65 billion total.