Pirelli: Investments In Telecommunications And Internet

Last year Conti boss Kessel raised the hackles of the Pirelli management not just once, at the end of October 1999, when he thought aloud in the presence of business journalists in Stuttgart on the subject of a joint venture with Pirelli Tyre Holding (PTH) – under German industrial leadership, of course -, but again, shortly afterwards, speaking to analysts in New York, although the Italians had not shown the slightest sign or willingness to sell. With a 1999 turnover of 9 billion euros, compared with the Pirelli group’s 6.5 billion, Continental seemed to be well equipped for such a venture.

But then the Italians sold their “Terrestrial Optical Networking Systems” – 1999 turnover 395 million euros – for no less than 2.15 billion US dollars to Cisco, which obviously left the Germans speechless. Since then all has been quiet.

It does not seem quite such a brilliant idea unnecessarily to provoke a group with a well-stocked “war chest”.The current lowest stock exchange value for a year, however, makes a takeover of the Continental group look positively cheap at the moment. Eighteen months ago Continental acquired brake specialist Teves (turnover: approximately 3.

8 billion marks) at a price of 3.3 billion marks. Today the stock exchange value of the whole group is only marginally higher.

”Flight” from the tyre business, with Continental no longer presenting itself as a tyre specialist but as an automotive supplier in a kind of Champions League, has so far failed to convince the public. First Conti’s managers complained bitterly that Goodyear had dragged all the stock exchange values of tyre shares down with it, but now it is apparent to them that other motor industry suppliers, like Kiekert, Phoenix, Delco Remy, also experience their lowest figures of the last 52 weeks. And no change in sight.