Pirelli will be sold to state-owned China National Chemical Corp (ChemChina) after shareholders for the Italian tire manufacturer agreed to the deal, estimated to be worth 7.3 billion euros (approximately $8 billion). Pirelli is the fifth largest tire manufacturer in the world and is known for its performance rubber, namely the P Zero range, while ChemChina specializes in a number of areas including rubber products such as tires.
The move provides ChemChina with a globally recognized brand name as well as some top technology (part of Pirelli’s business is the exclusive supply of tires to Formula One). In return, Pirelli will have greater access to the Asian market. The running of the business is expected to remain in Milan, Italy.
The sale of Pirelli to one of China’s state-owned enterprises follows the sale of a 14 percent stake in French automaker PSA Peugeot Citroën to Dongfeng early last year. The Chinese government also owns a 37 percent stake in Swedish automaker Volvo, with the rest mostly owned by Chinese automaker Geely.
Pininfarina Sergio concept car
In the same week that the sale of Pirelli was announced, it’s also being reported that another storied Italian brand, Pininfarina, best known for its numerous Ferrari designs, may be up for sale. Citing an anonymous source, Bloomberg is reporting that India’s Mahindra & Mahindra, a major manufacturer of tractors and SUVs, and a current client of Pininfarina, is in talks to buy the Italian design firm.
The negotiations, which have lasted weeks, are continuing and could still fall apart, the source said. The news caused Pininfarina’s share price to jump 26 percent yesterday, with the company’s value now 155 million euros (approximately $170 million).
Mahindra has a number of international acquisitions already under its belt, including majority stakes in Korean brand Ssangyong and a scooter business of Peugeot. The company is also thought to be in negotiations with Saab owner NEVS over a major tie-up.
Stay tuned for an update.