Pirelli in advanced talks with China Chemical Corporation over stake sale
Pirelli, the listed Italian tyre company, is in negotiations to sell a stake to China Chemical Corporation (CCC) Italian language daily Il Messaggero reported.
The negotiations between parties are at an advanced stage with some details on stake sizes, financial questions and governance still to be decided, the unsourced article said. CCC will take its stake in Pirelli via its subsidiary Aeolus Tyre. The report said Aeolus would almost certainly take a 51% stake in Pirelli.
The boards of CCC and Pirelli will meet on the weekend or on Monday 23 March at the latest to discuss the dossier, the report said. A banking consortium headed by Unicredit is likely to provide financing of EUR 3.6bn for the deal to go ahead, it added. Pirelli would also receive a EUR 350m loan. The report said a public offer itself would be undertaken by a specially constituted vehicle registered in Luxembourg.
An unsourced report in Il Corriere della Sera claimed that Lazard has drawn up the operation.
The the plan is to relist Pirelli in the next four years, but only its car tyre operations. The report said Pirelli's truck tyre operations would instead be spun off into a newco that would also contain the operations of Aeolus Tyre.
A report in the Italian language Carlo Festa blog cited unspecified rumours claiming that Rosneft, presently Pirelli's largest shareholder, is looking to exit because of the pressure of sanctions. Rosneft would continue to maintain a small stake in Pirelli, it added.
The report said a delegation from Camfin, the holding company that controls Pirelli, is presently in Moscow negotiating Rosneft's exit.
Source Il Messaggero, Il Corriere della Sera, Carlo Festa Blog