News

Chinese state company agrees to buy Italy s Pirelli

Chinese state company agrees to buy Italy s Pirelli
Autos
A mechanic checks the pressures in a new set of Pirelli tires ahead of the Australian Grand Prix in Melbourne, Australia, Thursday, March 24, 2011. (AP Photo/Rob Griffith)

Joe McDonald, The Associated Press

Published Monday, March 23, 2015 10:28AM EDT

BEIJING -- China s biggest state-owned chemical company said Monday it plans to buy Italian tire manufacturer Pirelli, adding to a string of high-profile Chinese corporate purchases in Europe.

ChemChina said it has agreed to buy a 26.2 percent stake in Pirelli Tyre S.p.A. from its biggest shareholder, Camfin S.p.A., which is controlled by the family of Pirelli chairman Marco Tronchetti Provera. The company said it would offer to buy the remaining outstanding shares.

Flush with cash from their country s boom, Chinese companies are stepping up acquisitions abroad as they diversify beyond their own economy, where growth is slowing.

Europe is seen as an attractive market for potential purchases due to the relative weakness of the euro right now and what Chinese companies see as less political resistance to large deals there than they might face in the United States.

Chemchina, also known as China National Chemical Corp., is one of China s biggest industrial companies, with businesses in petrochemicals, oil processing, agricultural chemicals, rubber products and chemical equipment.

The Beijing-based company, which has its own tire manufacturing operation, said it would support the growth and expansion of Pirelli, the world s fifth-largest tire supplier. Camfin said the deal would enable Pirelli to double its volume and may result in the de-listing of Pirelli from the Milan stock exchange.

In a statement, Camfin said Tronchetti Provera would remain CEO and that Pirelli headquarters would remain in Italy.

The deal reflects ChemChina s unusual status as a state-owned Chinese company that has made ambitious acquisitions abroad outside the finance and natural resources industries.

The acquisition of Pirelli, if completed, would be one of China s biggest to date in Europe.

So far this year, Chinese companies have announced 27 acquisitions in Europe totaling $12 billion, more than half of last year s total of $23.7 billion, according to Dealogic.
Read more on CTVnews
News Topics :
Similar Articles :
Business
China National Chemical Corp ChemChina is to buy Pirelli, the worlds fifth largest tire maker, in a 7.1 billion euro $7.7 billion deal that will put the 143 year old Italian company in Chinese hands....
Business
HONG KONG A Chinese state owned chemical maker offered to buy Swiss pesticide giant Syngenta for $43 billion in what would be the biggest ever foreign acquisition by a Chinese company....
Business
Chinese state owned Sinochem and ChemChina are in merger talks to create the worlds biggest industrial chemicals firm, to be headed by Sinochem chief Ning Gaoning, four people with knowledge of...
Business
Chinas state owned ChemChina will make an agreed $43 billion bid for Swiss seeds and pesticides group Syngenta, the companies said on Wednesday, marking the largest ever overseas acquisition by a Chinese...
Business
Chinese state owned chemical companies Sinochem Group and ChemChina are in discussions about a possible merger to create a chemicals, fertilizer and oil giant with almost $100 billion in annual revenue, three...