OAO Rosneft, Russia’s biggest oil producer, will become Italian tiremaker Pirelli & C. SpA’s biggest investor with a 13 percent stake as the manufacturer’s top investors reorganize their holdings.
The investment group known as Lauro61/Camfin that owns 26 percent of Milan-based Pirelli will dissolve itself and create a new company, with Rosneft taking half of the new vehicle’s stock and current private-equity partner Clessidra SGR SpA exiting, the tiremaker said today in a statement.
Rosneft will invest about 500 million euros ($695 million) and take over part of Camfin’s debt, according to a person familiar with the deal who asked not to be named as details aren’t final.
The accord tightens ties between Pirelli and Moscow-based Rosneft following a December 2012 agreement for the Italian tiremaker to sell products through the Russian company’s service stations. Rosneft will overtake Chairman Marco Tronchetti Provera’s company Nuove Partecipazioni as Pirelli’s biggest shareholder, though its stake in the tiremaker will hold steady and the firm will keep management control.
“The deal significantly reduces the speculative appeal of the stock,” Massimo Vecchio, an analyst at Mediobanca in Milan wrote in a report to clients today.
The agreement values Pirelli shares at 12 euros each, the partners said in the statement. Pirelli fell as much as 4 percent was trading down 3.7 percent at 11.60 euros as of 1:37 p.m. in Milan, giving the tiremaker a market value of 5.64 billion euros.
Rosneft declined to comment on the stake price, referring to the figure released in today’s statement. A Pirelli spokesman declined to comment on company ownership.
Tronchetti and two other investors in the current Camfin setup, UniCredit SpA and Intesa Sanpaolo SpA, will create a separate entity that will hold 50 percent of the new vehicle, the companies said. The two banks, Italy’s largest, will each own 10 percent of the separate entity, compared with 18.9 percent apiece in Camfin.
Tronchetti, who is also Pirelli’s chief executive officer, will own 80 percent of the entity and retain the power to appoint the chairman and CEO posts.