Sales of Trelleborg agricultural tyres in the Australian original equipment and replacement markets will benefit from Trelleborg Wheel Systems’ acquisition of Armstrong Tyres, an agricultural segment service and distribution company. Trelleborg has signed an agreement to purchase the Australian firm for an undisclosed sum, and the transaction is expected to be finalised in the second quarter of 2015.
After the second grand prix of the second year of Pirelli’s second three-year stint as exclusive Formula One tyre supplier, Motorsport director Paul Hembery addressed questions about its F1 programme in the ChemChina-owned era. “For us, it’s business as normal,” Hembery told motorsport magazine, Autosport. Indeed, the centrality of top-level motorsport to the manufacturer’s brand – “Motorsport for Pirelli remains key,” in Hembery’s words – is an obvious attraction to a Chinese company buying into the premium manufacturer’s market positioning.
Heuver Tyrewholesale, distributor of the Aeolus tyre brand in eight continental European markets, says it expects “many developments” now that its parent company ChemChina has acquired a share in Pirelli. Commenting on the transaction, director Bertus Heuver said “ChemChina is China’s largest tyre manufacturer and Aeolus Tyres is its leading international brand. We agreed import rights for Aeolus ten years ago, and immediately noticed their ambitions and willingness to make investments. So ChemChina’s decision to take over Pirelli is merely an extension of their existing philosophy and is proof of their vision and strength.
In case you haven’t heard, as much as 65 per cent of Pirelli is in the process of being sold to ChemChina. It’s a complex plan and there’s a long road ahead, but the deal has been done and so takeover wheels are in motion (see page 28 for complete coverage of this part of the story). So what’s next? The deal can’t fail to have an impact at Pirelli, but what about the other top five tyre manufacturers and beyond? We hinted at market consolidation in this column last month, with reference to restructuring proceedings at Shandong Deruibao Tire Co., Ltd and possible contagion in China; and Pirelli CEO Marco Tronchetti Provera made the market aware of that he was planning to sell his stake within two years in January 2014. But few would have named this particular bidder and this particular timing. Now we are faced with the possibility, even the likelihood that the Pirelli/ChemChina deal is going to precipitate further micro and macro consolidation within the tyre market – even a re-shuffle of the tyre industry’s top 10.
Desser Tire & Rubber Co., LLC. has acquired Europe’s leading aircraft tyre distributor, Watts Aviation. Located in Gloucestershire, Watts distributes a broad range of aircraft tyres and tubes as an authorized distributor for a number of major tyre brands. No details relating the price of the acquisition have been released.
The Pon Group has invested heavily in expanding its tyre business in recent years. After acquiring Euro-Tyre in 2010, the Dutch firm also took over German tyre wholesaler Reifen Gundlach. Jannes Bouman, Pon Group senior vice-president responsible for the Pon Tyre Group, now reports a further recent acquisition; the company has acquired a majority share in German B2C online tyre retailer Goodwheel GmbH.
With coverage of ChemChina’s purchase of Pirelli waning, various newswires have been reporting market rumours that Bridgestone has been preparing a counterbid for Pirelli. However, in an interview with Reuters on 26 March, Pirelli CEO Marco Tronchetti Provera said that such a move would be “a disaster”. He supported ChemChina’s bid, on the other hand, saying it is: “good for the future of Pirelli and guarantees its global growth”.
On 22 March 2015 Pirelli was sold to ChemChina in a move that was both broadly expected and yet surprising at the same time. Expected inasmuch as Pirelli’s top management had been hinting at an exit for the last couple of years. Surprising due to the identity of the successful bidder and because of the speed at which the acquisition appears to have been agreed. But it was not a surprise who had been in high level talks with the Chinese for around three years. Here Tyres & Accessories compiles the latest details relating to the enormously influential story and considers what the impact will be on the company itself as well as the wider market place.
In the early hours of 23 March 2015 Beijing Time, ChemChina’s China National Tire & Rubber Co. (CNRC) subsidiary signed an agreement with Camfin S.p.A. to purchase Camfin’s 26.2 per cent Pirelli shareholding at 15 euros a share. This values Pirelli at around 7.1 billion euros (£5.15 billion pounds). A joint tender offer by ChemChina, Camfin and other investors on the rest of Pirelli’s shareholding is now expected to follow.
News agencies are reporting China National Chemical Corporation, which names brands such as Aeolus amongst its number, is close to purchasing shares in Camfin, which own 26 per cent of Pirelli and would give ChemChina a controlling shareholding in Pirelli. For the last year or so Camfin has been owned by Russian oil firm Rosneft and a holding company of Pirelli’s chairman and chief executive, Marco Tronchetti Provera. Other significant shareholders include Italian banks Intesa Sanpaolo and UniCredit.
At the request of Consob, the Italian Securities and Exchange Commission, Pirelli has issued a short statement regarding claims that company chairman Marco Tronchetti Provera is working with an Asian partner with a view to it partially or fully acquiring Pirelli.
Italian news reports have led to a flurry of speculation that Pirelli is up for sale and could be considering working with an Asian partner. The speculation centres on reports published by Corriere della Sera suggesting Pirelli chairman Marco Tronchetti Provera is working on bringing in an Asian shareholder/partner/owner. Bloomberg named Yokohama Rubber Co. and Zhongce Rubber Co. as potential investors.
Tyre recycling machinery supplier Eldan Recycling has “joined forces” with Rapid Granulator following the latter’s acquisition by Eldan’s parent company, Swedish business group Lifco AB. Rapid Granulator will be consolidated in Lifco’s Environmental Technology division, which is a part of its Systems Solution business area and the division Eldan Recycling belongs to. Although Lifco has not disclosed how much it paid for the granulator manufacturer, it states the acquisition “will not have any significant effect on Lifco’s earnings or financial position in current financial year.”
Mahle has signed a definitive agreement to acquire the wholly-owned thermal business of US automotive supplier Delphi Automotive plc. In 2014, the division and its approximately 7,600 employees achieved annual sales of around $1.2 billion (roughly 1.0 billion euros). After approval by the relevant antitrust authorities, a closing of the deal is anticipated for the fall of 2015. Further, it is intended to acquire the joint venture of Delphi Thermal in China. Mahle said the takeover supports the strategic expansion of the important thermal management growth sector within the Mahle Group.
Through its Trelleborg Wheel Systems business area, Sweden’s Trelleborg AB has finalised the acquisition of French industrial tyre distributor D.G. Manutention Services SAS (DGMS), a company active in southern France and specialising in the distribution and service of industrial tyres, such as those fitted on forklifts. The transaction was consolidated on 1 February.
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