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Italy’s Pirelli to merge with ChemChina

  ITALY, MILAN (Dec. 24, 2015) – The state-owned enterprise of China Republic, ChemChina (China National Chemical Corporation) took an advantage of weak euro, wherein, Europe was statically crawling towards economic stability and announced earlier this year to buy into a share of world’s fifth largest tyre maker, Pirelli C. & S.p.A. with a deal worth USD7.7 billion, excluding debt of the company.

 The deal was with the consent of top shareholders of Pirelli and after the merger is expected to be privately taken care by ChemChina's tyre division, as reported by the company’s official on 23rd march 2015.

 Recently, the deal was approved by the board of directors of Pirelli & C. S.p.A. and Marco Polo Industrial Holding S.p.A., the investment vehicle arm established by the Chinese giant last year to undertake the procedure of Pirelli’s acquisition.

 Presently, ChemChina directly or indirectly holds all the ordinary shares of Pirelli and a part of more than 93% in the savings shares of the Italian tyre maker.

 In addition, the concern will further be discussed in the extraordinary shareholders meeting, to be held on 15th Feb. 2016, wherein, shareholders would vote to approve new governing laws of the entity. 

However, during the amalgamation process of the two multinationals, the name and location of the company’s registered office won’t be amended. The procedure of merger is expected to completed by mid-2016. 

After the merger, Marco Polo International Holding Italy S.p.A. would hold 100% ordinary shares and almost 97% of the savings shares of Pirelli. 

The recent report published by TechSci Research, “China Tyre Market Forecast & Opportunities, 2020” depicts that the expanding Chinese automobile industry in terms, the demand for technologically advance tyres would witness a rise in future. TechSci Research projected that under this prodigious merger of the two companies, China National Chemical Corporation would get a suitable access to the advance technology of manufacturing premium ranged tyres, and would give Pirelli C. & S.p.A. a better pathway to tap the huge market of China. Moreover, the merger would lead Pirelli, to increase its dominance in the country by introducing superior products at comparatively marginal costs.


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