This requires more complicated procedures for regulatory approval and the company was unable to form a plan within the pledged period, explained its statement.
“The company will start a series of co-operations with Pirelli in research, technology, management and product quality,” Aeolus said.“Aeolus will also benefit from synergic effects brought by global resources.”
Pirelli Industrial, the holding company of Pirelli's industrial tire units, is the market leader in Latin America for truck and agricultural tires and also a top player in Europe, the Middle East and Africa, with plants located in Brazil, Turkey and Egypt.
Last year the company produced 4.3 million truck tires and 350,000 agricultural tires, down by 7 and 8 percent, respectively, from 2014.
In 2015, Pirelli Industrial reported a $2.75 million net loss, due to delayed receivables from its Venezuela subsidiary, on $1.2 billion revenue.
Last year Double Happiness suffered a $7.5 million net loss on $174 million in sales; Yellow Sea reported an $8.5 million net loss on $99 million revenue.
Despite the deficit, the transactions would “help enhance scale effects and lower procurement costs through increased bargaining power,” Aeolus said. .
Aeolus' passenger tire unit reported a net loss last year of $10.1 million on sales of $76 million. The unit's annual capacity is listed as 5 million units
After selling the unit, “the company will be able to focus on the research and marketing for industrial tires,” the company said.
Jane Ho is a correspondent for European Rubber Journal, a Tire Business sister publication under the Crain Communications banner. This story appeared originally on ERJ's website.