Italian Brokers Believe Pirelli to Separate Tyre Unit from Real Estate Business

A Reuters report suggests that Pirelli is preparing a full separation of its tyre business from its real estate concerns in order to boost the Group’s value in the wake of improving tyre financial results. The Milanese broker Equita is reported as saying, “We believe some recent moves at the corporate level are clear pointers that will lead to a separation of Pirelli & C Real Estate PECR.MI from the group to transform Pirelli & C from a holding company to a tyre maker.” While the move is unlikely to happen in the short-term (separations of this kind generally take up to a year, says Reuters), the concentration on its tyre business could be motivated by the fact that Pirelli trails the market caps of Michelin, of whose cap the report states Pirelli’s is about a quarter at 2 billion euros, and Continental, though it is active in similar markets and sectors.