The chairman of China National Chemical Corp (ChemChina) yesterday said he hoped to re-list Italy's Pirelli on the Italian stock exchange after his firm agreed earlier this month to acquire the world's fifth-largest tyre maker.
Ren Jianxin also warned that a counterbid for Pirelli would hurt the Italian firm's investors and long-term strategy. ChemChina has agreed to become majority owner of Pirelli as part of a multi-layered €7.3 billion (HK$61.6 billion) deal, putting one of Italy's storied manufacturing names in Chinese hands.
"We were worried that due to cheap liquidity, there might be blind competition," Ren said. "But a counterbid will hurt Pirelli investors and also its long-term strategy."
On Thursday, Pirelli chief executive Marco Tronchetti Provera said his firm is not talking to others about a possible counterbid.
Ren is betting the Pirelli acquisition will accelerate the transformation of state-owned ChemChina's tyre and rubber business. The deal will give the Beijing-based conglomerate access to technology to make premium tyres which can be sold at higher margins, and give the Italian firm a boost in China, the world's biggest car market.
Pirelli's industrial tyre operations will be merged with ChemChina's Aeolus Tyre unit, making the combined firm the world's fourth or fifth biggest industrial tyre maker, Ren said.
Ren said Pirelli workers would not be fired after the takeover. The deal, he said, is about expanding scale and increasing market share. "That means we will need more people to join; there will not be redundancies."
The deal is the latest in a series of takeovers in Italy by cash-rich Chinese taking advantage of a weak euro as Europe emerges from economic stagnation.
