‘No change’ after Pirelli’s China buyout – Hembery (Update)

UPDATE Chinese chemical fertilizer and tire company ChemChina (Beijing) has recently made a bid for Italian tire manufacturer and official F1 supplier Pirelli.

The Chinese company is partnered with Camfin S.p.A. (Cam Finanziaria SpA). However, the approximate bid of over 7 billion Euros may fall short of what may be needed to appease minority investors.

Unfortunately for them, the ChemChina deal appears to be the best (and only) offer on the table. In order to take Pirelli private and off the stock market, a 90% stock holding would be required. This is the challenge ahead that could stymie the effort.

The move would open up an extremely large automotive market for the premium tire maker, offering incredible opportunities for Pirelli. The transaction may also play a part in Pirelli's negotiation with Formula One as their contract as supplier is due to expire at the end of 2016.

Paul Hembery, Pirelli's director of motorsport, has been vocal about the company's desire to have Formula One spice up the show with new regulations.

"It's not for us to tell people what should change, and how it should change, but change is needed," he told the Observer. "We're anxious to understand what's going to happen in 2017, when we will be looking at a new contract.

"We'd like to see what the plan is. We are in the entertainment business. Some people get ruffled by that idea, but if we don't entertain people don't watch us, and then the sponsors won't come, and the cycle continues."

Hembery also talked about the possible change in ownership and Pirelli's future in F1 during the Friday press conference at the Malaysian Grand Prix.

"The biggest change will actually be in our industrial truck business where we will be combining both activities to make the most of the synergies in those businesses," he explained. "Mr. Tronchetti will remain for another five years as our CEO. They've bought into the management team that we have in Pirelli and an integral part of our vision and our work is also Formula One so from that point of view, no change.

"Having said that, we have many discussion, we read many discussions where the sport is looking, what it wants to do going forward and of course, if you're going to go through a tendering process, you would like to understand what those changes are and what the sport's going to look like, so it's just a practical thing really.

"Assuming we get some of that visibility and it looks good and we do hear some good suggestions coming through, if the sport allows the change to happen and that tends to be the biggest issue, people tend to agree to disagree rather than get a commonality of view and that tends to hinder the introduction of a lot of very sensible and a lot of very good ideas. So if that can change and we can actually get the visibility going forward, then we're very happy with the sport." Richland F1

03/28/15

Paul Hembery

(GMM) Pirelli's F1 project is "business as usual" despite the EUR 7 billion takeover of the historic Italian company by China.

It emerged earlier this week that state-owned China National Chemical has secured control of Pirelli, which until now has been in Italian hands for more than 140 years.

Pirelli chief executive Marco Tronchetti Provera, however, will keep his role.

And the marque's F1 boss, Paul Hembery, told reporters in Malaysia that despite the Chinese buyout, it is "business as usual".

"We've had many different international shareholders over the years," said the Briton.

"They've bought into the management team and an integral part of our vision and our work is also formula one so from that point of view, no change," added Hembery.

He said the bigger issue is the direction F1 is taking for the future, amid talk of more powerful engines, wider cars and potentially also bigger tires with a lower profile.

Hembery said the details of the future regulations could affect Pirelli's approach to the forthcoming tender process for the next F1 tire supply contract.

"Of course," he said, "if you're going to go through a tendering process, you would like to understand what those changes are and what the sport's going to look like.

"Assuming we get some of that visibility, and it looks good and we do hear some good suggestions coming through, if the sport allows the change to happen … then we're very happy," said Hembery.

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