China National Chemical Corp., parent of China National Tire & Rubber Co. and other rubber industry holdings, has struck a deal to buy a 26.2 percent share in Pirelli & C. S.p.A. and is preparing a bid for control of the world’s No. 5 tire maker.

ChemChina’s deal with Italy’s Camfin S.p.A. for Camfin’s 26.2 percent shareholding is for $16.25 a share, or a total of about $2 billion. The transaction is subject to approvals by the "competent Chinese and foreign governmental authorities, ChemChina said in a news release.

ChemChina also said following completion of the Camfin deal, it would make a joint tender offer with Camfin and other investors for the “remaining stake” in Pirelli.

Marco Tronchetti Provera, Pirelli chairman and CEO whose family is the controlling shareholder in Camfin, said in a statement that ChemChina’s offer “represents a great opportunity for Pirelli. CNRC’s approach to business and strategic vision guarantee Pirelli’s development and stability.”

Jianxin Ren, ChemChen president and general manager, said in a statement, “We are delighted with the opportunity to team up with Marco Tronchetti Provera and his team to continue to build together a world class organization and a market leader in the global tire industry.”

ChemChina’s bid would value Pirelli at $7.7 billion, based on Pirelli’s outstanding shares.

ChemChina is a China state-owned enterprise under the administration of the State-owned Assets Supervision and Administration Commission of the State Council, established in May 2004 with the approval of the State Council.

With annual sales of $39.4 billion in 2013, ChemChina is considered China's largest chemical company and 19th among the world's top 100 chemical corporations. It is ranked by Fortune magazine on its Fortune 500 list.

ChemChina is active in six sectors: new chemical materials; basic chemical materials; oil processing; agrochemicals; rubber products; and chemical equipment, according to ChemChina’s website.

China National Tire & Rubber describes itself as China’s largest producer of off-road tires, controlling the brand names Aeolus, Double Happiness, Rubber Six, Torch and 7425, and it is a leading producer of rubber conveyor belt, auto rubber hose and air conditioner hose. It lists assets of $2.4 billion.

Among its tire industry holdings are Aeolus Tyre Co. Ltd.; ChemChina Guilin Tire Co.;Ltd.; Double Happiness Tire Industrial Co. Ltd.; and Qingdao Yellowsea Rubber Co. Ltd.

Source: rubbernews.com