An $8bn deal with ChemChina puts one of Italy's oldest household names into Chinese hands. But, says Pirelli CEO Trochetti Provera, it secures growth - and a counterbid from Bridgestone would be 'a disaster'. Grace Pascoe reports.
As far as iconic European brands go, they don't come much more famous than Pirelli. The company have been turning tyres around for over a hundred years. With a 7.3 billion euro takeover deal announced earlier this week, comes new owners. And a sense among some that what is China National Chemical Corp's gain is Italy's loss. Pirelli's Chairman and CEO Marco Tronchetti Provera says: not so. SOUNDBITE (ENGLISH) PIRELLI, CHAIRMAN AND CEO, MARCO TRONCHETTI PROVERA, SAYING: "It's good for the future of Pirelli, it guarantees the growth of technology, the global growth of Pirelli. Pirelli is already global company, 94 percent of our business is outside Italy in both production and markets. So, it was a way to open the gate of China.'' So is this the right deal for Pirelli? Neil Unmack is from Reuters BreakingViews. SOUNDBITE (ENGLISH) REUTERS BREAKINGVIEWS, NEIL UNMACK, SAYING: "In many ways it makes a lot of financial sense for at least one of the owners of Pirelli, Camfin, owner of 26 percent with Marco Tronchetti Provera, Rosneft and some Italian banks. So those owners will make a lot of money if they can find a home for the trucks business and relist the shares. Is it the right deal for the rest of the shareholders, that is another matter. They want to buy the company out at 15, 15 arguably looks like quite a cheap price." Rumours of a Bridgestone counter offer were firmly punctured by Tronchetti Provera. He says such an option would be a "disaster" - adding there were too many overlaps between the two companies. He said he was looking for an industrial and not a financial investor. SOUNDBITE (ENGLISH) PIRELLI, CHAIRMAN AND CEO, MARCO TRONCHETTI PROVERA, SAYING: "There are last-minute people coming and trying to make short term profits with very short term speculative attitude. I'm an industrialist and I want to guarantee the future to Pirelli, its people ... this transaction doesn't affect the employment in any place of the world so I think it is good for everybody." ChemChina agreed Pirelli's conditions of keeping the company's headquarters and technology in Italy. And holding onto the current management team. (SOUNDBITE) (English) PIRELLI CHAIRMAN AND CEO MARCO TRONCHETTI PROVERA SAYING: "I think this is a good example where governance, management are balanced with capital and capital is coming not to colonise the company but just respecting the company and supporting the growth of the company." The Pirelli chief said Matteo Renzi had not taken much convincing about the deal. The alternative he put to the Italian prime minister: the risk that Pirelli could become a target for others to split the firm.