American Motorcycle Dealer AMD 189 April 2015 | Page 64

Pirelli Metzeler to come under
BRIEFS Chinese ownership in $8bn deal

NEWS

Former Drag Specialties Sales
and Marketing VP Greg
Blackwell has been hired by
KTM North America as their VP
of PG&A.
Kuryakyn has hired John Kear as its
new Head of International Sales.
Kear joins from being responsible
for Dealer Commercial and
Network Development with Honda
Europe, and has also held positions
with Peugeot UK and with Harley in
the US and Europe.
Champion Trikes has
announced that it is closing
the Lehman Trikes factory at
Spearfish, South Dakota with
the loss of 12 jobs. Garden
Grove, California based
Champion bought Lehman in
2012 after the company had
run into financial difficulties
and suspended production.
Harley-Davidson's widely reported
Kansas facility layoff of 169
employees follows 140
redundancies in May 2013 and will
leave some 630 people staffing the
400,000 square foot facility it built
in 1998.
Polaris is making some
progress in achieving road
legality for its Slingshot threewheeler in a handful of states
that have so far refused to
grant certification. Meanwhile
the Autocycle Safety Act is a
new federal bill being
introduced in the US Senate to
set standards and resolve
status for such vehicles.

THE iconic Italian Pirelli tire
brand and its German Metzeler
specialist motorcycle tire
subsidiary are being purchased
in a complex 8 billion dollar deal
by the giant China National
Chemical Corp (ChemChina).
ChemChina will become the
majority owner of the world's fifth
largest tire maker, with the 67 year old
Marco Tronchetti Provera, one of
Italy's best known business men, who
married into the Pirelli founding family
30 years ago, staying on as Chief
Executive for another 5 years.
ChemChina is a state-owned
Chinese chemical company whose
China National Tire and Rubber Co
subsidiary would initially purchase the
26 percent stake in Pirelli held by
CamFin, its current largest
shareholder, for $1.9 billion.
The new owner, who would then
seek to take over the remaining share
of the 143 year old Italian company,
securing control of Pirelli's intellectual
property, manufacturing facilities and
tire technology.
With initial bridging finance being
provided by a consortium of Western
banks headed up by JP Morgan,
CamFin, which itself is 50 percent
owned by Russian oil company
Rosneft - whose President, Igor
Sechin, is the subject of US
government sanctions due to his close
associations with Russian President
Vladimir Putin.
Once the initial stage of the deal
has passed regulatory hurdles by the
summer (assuming it does), a
mandatory tender offer for Pirelli's
remaining share capital will be made
at the same price that ChemChina is
paying for CamFin's stake representing a considerable premium
over the recent average trading prices

of the stock concerned.
Pirelli is the sole tire supplier to
Formula 1, with sales exceeding €
6
billion ($6.5 billion) and a sales
network that covers more than 160
countries and regions.
Although Pirelli's Powersports
industry tire operations are a small
percentage of its overall business, the

the deal
has sent
shockwaves
Pirelli brand is nonetheless a major
player in the motorcycle tire market,
not least because of its ownership of
the German Metzeler brand.
ChemChina, which has a strong
position as an industrial tire maker in
China through four active
subsidiaries, including Aeolus, has
long been looking for overseas
acquisitions. Its planned purchase of
Pirelli will help it to grow its market
share in premium consumer tires.
The sprawling Bejing based group
has some 140,000 employees and
nine listed business units whose
shares trade on the Shanghai or
Shenzen stock exchanges. Founded by
Mr Ren Jianxin, who is kn