ChemChina proceeding with Pirelli offer

MILAN, Italy (Aug. 5, 2015) — China National Chemical Corp.'s bid for operational control of Pirelli & C. S.p.A. will take form officially on Aug. 11, when Italian institutional investment company Camfin S.p.A. plans to transfer its 26.2-percent shareholding in Pirelli to Marco Polo Industrial Holding S.p.A.

That's the upshot of an announcement Aug. 5 by Camfin on the Borsa Italiana in Milan that the ChemChina/Camfin deal announced March 22 has cleared all antitrust and other relevant regulatory hurdles.

Marco Polo Industrial Holding is the name of a newly incorporated company that was referred to in the original agreement as “Bidco.”

On Aug. 11, Camfin will transfer its direct shareholding in Pirelli to Marco Polo Industrial Holding while simultaneously reinvesting in another entity, Marco Polo International Italy S.p.A. (referred to earlier as “Newco”),  which the filing says controls Marco Polo Industrial holding through a third entity called Marco Polo International Holding Italy S.p.A. (Holdco).

Once these tranfers and reinvestments have occurred, the filing states, Marco Polo Indutrial Holding will launch its “mandatory tender offer” for the remaining ordinary share capital of Pirelli & C. for 15 euros ($16.32 at prevailing rates) a share, as well as a “voluntary tender offer” for the entire “savings share capital” of Pirelli, with a goal of acquiring at least 30 percent of the savings share capital, also at 15 euros a share.

ChemChina, through its China National Tire & Rubber Co. subsidiary, will be a part owner of Marco Polo International Italy S.p.A. and Marco Polo International Holding Italy S.p.A., and therefore will be overseeing the the mandatory and voluntary tender offers for the remaining Pirelli shares.

Pirelli's shares have been trading at slightly more than that 15 euros a share in recent weeks, according to Pirelli's website.

Pirelli Chairman Marco Tronchetti Provera also is involved in the deal through an investment company called Coinv, which he indirectly controls and which is a co-investor in the deal, the filing states.

Camfin's transfer of Pirelli shares to Marco Polo Industrial Holding on Aug. 11 will set into motion a series of transactions that eventually will give ChemChina outright control of Pirelli and allow it to take the Milan-based tire maker private.

It also would trigger a series of moves by ChemChina to restructure Pirelli, primarily involving the integration of Pirelli's industrial tire business — medium truck, agricultural and industrial tires — with those of Fengshen Tyre Co. Ltd., owner and producer of the Aeolus and Windpower brands, Camfin said.

The process would create a business with an annual capacity of about 12 million commercial/industrial tires.

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