ChemChina is set to buy one of the world's largest tyre brands.
Ready to race - Pirelli F1 tyres Image: Grandprix247.com |
The state-owned chemical firm has agreed to pay €7.1bn ($7.8bn or more than 48bn Yuan, for one of the most recognisable tyre brands in the world. The Italian manufacturer is owned by a combination of investment companies and banks, including the Russian energy giant, Rosneft. The purchase would be made by China National Tire & Rubber, the tyremaking division of ChemChina.
Pirelli's Chief Executive, Tronchetti Provera, who is also a major shareholder in the company, will remain in post after the takeover. However, the deal is not completely sealed, needing a public offer to win over the remaining Pirelli shareholders.
Pirelli was founded in 1872 by Giovanni Pirelli and has grown to become the fifth largest tyre manufacturer globally. It has been involved in motorsport since 1907 and the sole tyre supplier to the Formula One race series since 2011, with the contract in place until 2016.
Once finalised, the deal will secure premium tyremaking technology for ChemChina, while giving Pirelli direct access to the burgeoning China market.