China National Chemical Corp. (ChemChina), which agreed earlier this month to acquire Italy’s Pirelli, said it plans to re-list the world’s fifth-largest tire maker on the Italian stock exchange.
ChemChina chairman Ren Jianxin warned that a counterbid for Pirelli would hurt the Italian firm’s investors and long-term strategy, Reuters reported.
“We were worried that due to cheap liquidity, there might be blind competition,” Ren told reporters. “But a counterbid will hurt Pirelli investors and also its long-term strategy.”
Pirelli chief executive Marco Tronchetti Provera on Thursday told Reuters that his firm is not talking to others about a possible counterbid. Pirelli’s top shareholders agreed to the deal last week.
Pirelli’s industrial tire operations will be merged with ChemChina’s Aeolus Tyre Co. (600469.CN) unit, making the combined firm the world’s fourth or fifth biggest industrial tire maker, Ren said.
The 7.3 billion euro (US$8 billion) deal will give the Beijing-based conglomerate access to technology to make premium tires which can be sold at higher margins, and give the Italian firm a boost in China, the world’s biggest car market.
It will also allow the combined firm to expand its presence in China and Asia.
Ren described his partnership with Tronchetti as a “very beautiful marriage” and said the Italian will be CEO for the next five years, after which Tronchetti would pick his successor.
Tronchetti said he may stand down as CEO before five years if the right successor could be found. He also said Pirelli may be re-listed within four years, though not necessarily in Milan.
Ren dismissed fears that the acquisition would result in redundancies at the tire maker, noting that the company actually plans to expand scale and increase market share.
“That means we will need more people to join; there will not be redundancies,” he said, adding he plans to invite Pirelli’s union members to visit China.
ChemChina, which operates six different business segments, reported a revenue of about 300 billion yuan (US$48.27 billion) in 2014, Ren said.
– Contact us at email@example.com