Milan

Pirelli's Tronchetti takes control of rival tire maker

Tronchetti stays Pirelli chairman, expects to merge with Camfin

Pirelli's Tronchetti takes control of rival tire maker

Milan, June 5 - A group led by Pirelli Chairman Marco Tronchetti Provera announced Wednesday that it has the financial backing to take control of rival tire maker Camfin. The deal, announced in a statement, ends both a long-running dispute and tense partnership between Pirelli and family-owned Malacalza Investimenti, which said it would sell its 12.37% stake in Cam Finanziaria SpA - better known as Camfin. Camfin is Europe's third-largest tire maker. Tronchetti will retain control of Pirelli as well as remain chairman, according to a joint company statement. Eventually, the statement said, Pirelli and Camfin will be merged. He pulled off the deal after winning financial support from Intesa Sanpaolo, UniCredit, and private-equity fund Clessidra to purchase the Malacalza stake. According to the statement, Clessidra will invest as much as 150 million euros while UniCredit and Intesa are expected to invest a maximum of 115 million euros each. Minimum investments were set at 91 million euros and 41 million euros, respectively. Tronchetti made the deal, after much wrangling, through a new holding company named Lauro Sessantuno which is now on the hunt for all outstanding Camfin stock. Estimated value of the entire Camfin stock is just under 630 million euros. Wednesday's deal sent trading in Camfin shares into turmoil on the Milan Stock Exchange and for a brief period Wednesday morning, and it was suspended. When trading resumed, share prices dropped by about 8% to 79 euro cents. The new Lauro Sessantuno holding company will own 60.99% of Camfin, including Tronchetti's shares, and said it will offer 80 euro cents for outstanding stock in Camfin. As part of the deal, Malacalza agreed to end legal challenges over Tronchetti's holdings, according to the statement.

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