ChemChina to buy Pirelli for $7.7 billion
If ChemChina can conclude the deal, it plans to take Pirelli private, then relist after four years. The acquisition would give the Chinese company a guidebook on premium tire technologies, and would give Pirelli in-house access to the Chinese market as well as the kind of pocketbook it needs to challenge Michelin, which has 2.5 times the market capitalization, and Continental, which has six times the market cap.
Pirelli's industrial business would be hived off to ChemChina's Aeolus industrial tire brand. Assuming the deal gets done, we wonder how it will affect Pirelli's involvement in Formula One. A new tender for F1's tire supply will be conducted later this year, and Pirelli motorsport boss Paul Hembery has already said the company can't commit to bidding until it knows what's happening with the regulations going forward. Now it might first need to figure out what's happening with its own objectives.
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