ChemChina’s chairman, Ren Jianxin, has publically reiterated his and his company’s commitment to completing its proposed takeover of Pirelli. Speaking to the Financial Times, Ren quoted a Chinese proverb and explained: “…It means that one must do everything in one’s power to facilitate a marriage. We are hoping that all the pieces can come together for our wonderful marriage with Pirelli.”
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.
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.
Euro Car Parts acquired 27 former Unipart Automotive branches yesterday (7 August). Following negotiations with Unipart Automotives’s administrators, Mark Orton, Will Wright and Jonny Marston from KPMG, Euro Car Parts has secures the sites across England, Scotland and Wales, taking the ECP network to 194 branches. At the same time Parts Alliance reported it had taken on over 500 ex-Unipart Automotive works.
While there hasn’t yet been a clear outcome of the Unipart Automotive rescue talks, new bidders have entered into takeover discussions. Sources close to the talks have confirmed to Tyres & Accessories that buyout firm R Capital, which is known for an earlier rescue of the Little Chef chain in 2007 (the café business was sold to Kuwaiti investors last year) has now entered the Unipart Automotive rescue talks.
Investment bank William Blair said it views a potential rescue deal between Euro Car Parts and Unipart Automotive, if it were to happen, as “a good fit”. However, these words were written in an investor’s note dated 10 July and so far there hasn’t been any more information on how the talks with Euro Car Parts, Better Capital and at least one other party are progressing as yet.
Sources are reporting that the Unipart Automotive rescue bids have been received and we are likely to hear the outcome in the next 24 hours, but these claims could not be officially verified. Earlier in the week separate sources close to the negotiations told Tyres & Accessories they were expecting talks to conclude towards the end of the week, which would seem to fit into the same timeframe. With managers saying they were hopeful talks could be wrapped up in 36 hours at the beginning of the process on 8 July, the fact that almost 10 days have now passed suggests things are becoming increasingly urgent. It is also putting pressure on its loyal workforce. However, the official line from shareholders Unipart Group and H2 Equity as well as one of the three bidders Euro Car Parts has been a unified “no comment”.
We know Unipart Automotive is in need of a buyer. We know at least three companies including Euro Car Parts and Better Capital are talking to the owners about a takeover/rescue plan. But a lot remains unknown and so Unipart Automotive’s roughly 1600 employees are facing a great deal of uncertainty while the talks continue causing some to consider their employment options moving forward.
With numerous sources reporting that loss-making parts firm Unipart Automotive is just days away from a rescue plan (which you might read as a sales of the company), and with at least three bidders being associated with the deal, fast-growing rival Euro Car Parts could be seen as a front runner. But first a little background. Following the initial news reports Unipart Automotive was close to calling in the administrators on 8 July, a day later minority shareholder Unipart Group clarified its relationship to Unipart Automotive:
Consolidated net income at online tyre dealer Delticom has decreased for the second consecutive year, falling 47.9 per cent year-on-year to €11.6 million for 2013. This is 67.8 per cent lower than the 15-year old company’s best ever net income of €36.0 million, which it achieved in 2011. Nevertheless, upon releasing its 2013 Annual Report the company defended this result by claiming its business model “has once again proven its resilience” and that Delticom ran a profitable business last year despite an “adverse” market environment.
Cooper Tire & Rubber Company is suggesting that production of Cooper branded tyres is set to restart at the company’s Cooper Chengshan (Shandong) Tire (CCT) joint venture facility in Rongcheng, China. Production was halted when the workers at the Chinese joint venture company became embroiled in a significant industrial dispute with the US firm linked to the erstwhile Apollo Tyres takeover bid.
To mark his upcoming 66th birthday on 18 January, Marco Tronchetti Provera granted German newspaper Frankfurter Allgemeine Zeitung a long interview. During this he shared his intention to step down as Pirelli’s chief executive in the coming two years and subsequently sell the family’s 25.1 per cent share in the company. His three children are following their own paths and anyway it is difficult to inherit the role of business entrepreneur. Until last year, Tronchetti was also engaged in a showdown with the Genoa-based Malacalza industrial family. Tronchetti originally invited the Malacalza family to become investors, but later Tronchetti gained the impression they were trying to oust him. In the course of this struggle Francesco Gori, in charge of Pirelli’s tyre business, lost his job. He now serves as an advisor to Malacalza Investitmenti, which is currently the second-largest Pirelli shareholder but openly interested in expanding its involvement.
To mark the completion of Swiss company Gebrüder Schaad into the Starco organisation, the new entity Starco GS held a distributor day earlier this month at the company’s facility in Sübingen, Switzerland.
Apollo Tyres’ planned takeover of Cooper Tire appears to be in serious jeopardy as the latest court proceedings reveal the depth mistrust between the two companies. Cooper’s suggestion that Apollo has “buyer’s remorse” and is using the industrial dispute at Cooper Chengshan as a way of sabotaging the deal is the clearest example of this yet. The question of whether or not Apollo is putting everything it can into closing the deal is at the centre of the case. Apollo says it is doing everything it can despite the Chengshan and USW issues. Cooper says these are being used as delay tactics.
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