ChemChina close to Pirelli deal that would trigger buyout offer | Reuters

China National Chemical Corp (ChemChina) is close to becoming the biggest single shareholder in Pirelli (PECI.MI) in a deal that would trigger a 7 billion euro ($7.5 billion) buyout of the Italian tire company.

The Pirelli logo is pictured at their headquarters in Milan March 18, 2014. REUTERS/Alessandro Garofalo

Three sources familiar with the deal, which would be the latest in a string of Chinese investments in large Italian companies, said ChemChina was discussing a deal with Pirelli’s top shareholders to buy a holding company called Camfin, which owns 26 percent of Pirelli and is 50 percent owned by Russia’s Rosneft (ROSN.MM).

Without identifying the possible buyer, Camfin said it was in talks with an international industrial group to sell its Pirelli stake at 15 euros per share, valuing the tire group at 7.1 billion euros.

It said the stake would be transferred to a vehicle controlled by the new partner, after which a takeover offer for the rest the world’s fifth-largest tire maker would ensue.

If the offer succeeds, Pirelli will be delisted. The deal comes as Pirelli’s rivals Michelin (MICP.PA) and Continental (CONG.DE) look around for growth opportunities in Asia.

State-controlled ChemChina and Rosneft declined to comment.

Previous Chinese investments in Italy include State Grid Corp of China [STGRD.UL] buying into electricity grid company Terna (TRN.MI) and gas network operator Snam (SRG.MI).

Besides Rosneft, Camfin’s owners are a holding company comprising Pirelli chief Marco Tronchetti Provera as well as Italian banks Intesa Sanpaolo (ISP.MI) and UniCredit (CRDI.MI).

via ChemChina close to Pirelli deal that would trigger buyout offer | Reuters.

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