JIAOZUO, China — China National Tire & Rubber Co (CNRC) has "entrusted" a 52% ownership stake in Prometeon Tyre Group to Aeolus Tyre Co. Ltd., CNRC said Dec. 1, in an effort to "further solve the problem of horizontal competition between Aeolus and Prometeon."
Aeolus owns 10% of the corporate capital of Prometeon, the Milan, Italy-based commercial tire company that was spun out of Pirelli & C. S.p.A. in April 2017 and controls the Pirelli brand in terms of truck, bus, farm and OTR tires.
CNRC — through TP Industrial Holding, a company controlled by CNRC — continues to hold 52% of Prometeon’s corporate capital and such ownership is not affected by the envisaged transaction. The remaining 38% is held by High Grade (HK) Investment Management Ltd.
The entrustment will last until Dec. 31, 2023, CNRC said, and will be renewed automatically for a three-year period unless any party proposes to terminate or alter the agreement prior to its expiration.
Under the agreement, CNRC maintains the rights to the shares' ownership, disposal and profit distribution as well as Prometeon's liquidation and dissolution, along with rights to cash and assets upon such liquidation.
Aeolus is entitled to all remaining rights such as voting power, electing chairman and directors and making proposals to Prometeon's shareholders' meeting.
CNRC is Aeolus' controlling shareholder, owning 57.4%. CNRC is part of China National Chemica Co., which is the controlling shareholder of Pirelli Tyre.
This announcement leaves unanswered questions about Yokohama Rubber Co. Ltd.'s reported interest in acquiring some of the assets of Prometeon, which operates a pair of tire plants in Brazil and single plants in Egypt and Turkey and goes to market with four brands: Pirelli, Anteo, Formula and Tegrys..
Aeolus produces tires for trucks, buses and construction machines under the Aeolus, Fengli and Henan brands at plants in Jiaozuo and Taiyuan, China, with more than 7.000 employees
With estimated sales of $625 million in 2019, Prometeon is considered the world's 35th largest tire maker. Aeolus is slightly larger, with fiscal 2019 sales of $859 million.