Italian tyre maker Pirelli has had no contacts over a possible counterbid that would trump a buyout deal by China National Chemical Corp (ChemChina), its chairman and chief executive Marco Tronchetti Provera said in an interview on 26 March.
ChemChina has agreed to buy into the world's fifth-largest tyre maker in a €7.3bn (£5.4bn, $8bn) deal that will put the 143-year-old Italian company in Chinese hands.
Asked about market talk that Japan's Bridgestone could also be considering a takeover move, Tronchetti Provera said such an option would be "a disaster", adding there were too many overlaps between the two companies.
He said he was looking for an industrial and not a financial investor.
"There are last-minute people coming and trying to make short-term profits with very short-term speculative attitude. I'm an industrialist and I want to guarantee the future to Pirelli, its people...This transaction doesn't affect the employment in any place of the world so I think it is good for everybody," he told Reuters at the company's Milan headquarters.
"I have an agreement with ChemChina, why should I...it could not be done, it would be against my life, what I believe are the priorities. The agreement is with ChemChina, but just because it is the best possibility for Pirelli," he added.
Tronchetti Provera said the price of €15 per share offered by ChemChina was "very good". The deal will give state-owned ChemChina access to technology to make premium tyres which can be sold at higher margins. It will give the Italian firm a boost in the huge Chinese market and strengthen its truck tyre business.
"With ChemChina, the tyre business is not their core business, it's a minor business in the portfolio of ChemChina and they want us to make it successful. And this business is focused only on the truck business and that is the area where we need size so they provide us size and market. We provide them technology and the opening to other markets where we can, with our brand, do much more than what they can do with their brand," Tronchetti Provera said.
He added that before striking a deal with the Chinese company, Pirelli had held in-depth discussions with two other Asian, non-Chinese players for a tie-up with its truck tyre business. He did not name the two players involved but said they did not offer the same synergies as ChemChina.
Sleepless nights led to Pirelli-ChemChina deal
Tronchetti Provera was first approached by ChemChina's chairman Ren Jianxin three years ago and the two visited each other's plants, but could not fully agree a deal.
Ren came back half a year ago and six months of intensive talks followed. After a string of sleepless nights, a deal was finally clinched and sealed with a toast on 22 March.
Tronchetti Provera's main conditions were that the headquarters and technology of Pirelli remain in Italy and management is kept, while Ren only insisted that ChemChina become the majority shareholder in return for such a large investment.
While the deal represents the sale of another of Italy's industrial icons after a string of acquisitions in recent years, Tronchetti Provera said it was not difficult to convince Prime Minister Matteo Renzi of its industrial logic, adding the current government was more open than was the case in the past.
Tronchetti Provera told Renzi, whom he called on the eve of the signing, the alternative was running the risk that Pirelli could become a target for others who could split the firm.
"It's good for the future of Pirelli, it guarantees the growth of technology, the global growth of Pirelli. Pirelli is already global company, 94% of our business is outside Italy in both production and markets. So, it was a way to open the gate of China also for the truck business, today we are strong in China with the consumer business, in the truck business we have a very small unit and it's the future, so China and Asia are the future for truck, agro, OTR, businesses," he said.
"I think this is a good example where governance, management are balanced with capital and capital is coming not to colonise the company but just respecting the company and supporting the growth of the company," he added.
Tronchetti Provera, who started working for the tyre maker in 1986 after marrying a member of the Italian family that founded it, had been entrusted with the search for a successor who could either come from within the company or outside, not excluding the option of a future Chinese chief executive.
The 67-year-old said that while the agreement envisioned him staying on as Pirelli CEO for another five years, he could leave the company earlier if he found the right successor.