Pirelli hits back at China deal critics

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Pirelli CEO Marco Tronchetti said he was worried by "outdated kneejerk reactions" to the deal. Photo: Giuseppe Cacace/AFP
14:50 CET+01:00
The boss of Italian tyremaker Pirelli on Tuesday accused those against the company's takeover by a Chinese firm of masking nationalist objections in calls for a change of industrial policy.

Defending a €7.4 billion accord which paves the way for state-owned ChemChina to take control of one of Italy's industrial icons, Pirelli CEO Marco Tronchetti said the deal was good for the company and for Italy.

He insisted that jobs, the company's base and high-tech research and development activities would stay in the country and be strengthened.

"Some of the outdated kneejerk reactions worry me," Tronchetti said when asked about criticism of the deal from labour unions.

"A real industrial policy is about creating the conditions to attract investment which creates jobs, encourages training and bolsters technological development, leveraging the excellence that fortunately still exists in this country," he said in an interview with Corriere della Sera.

Tronchetti said Italy was lagging behind countries such as Britain, Germany and Spain, where inward investment has helped revitalize flagging automobile industries.

"Why are there these problems in Italy? The response cannot be a nationalist approach dressed up as industrial policy," Tronchetti said.

ChemChina's deal with Pirelli's largest shareholder represents the biggest single move yet in what is a growing trend for Chinese companies to acquire Italian assets.

That trend was highlighted by the media on Tuesday but reaction to the Pirelli deal has been muted, reflecting acknowledgement across the political spectrum that Italy needs investment to revive a stagnant economy and cut unemployment from current record levels.

Analysts have hailed the ChemChina tie-up as a perfect fit for the Italian tyremaker, predicting that the strength of the Pirelli brand combined with low-cost production in China and a greatly enlarged market footprint would strike fear into the hearts of rivals such as Goodyear, Michelin and Continental.

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That view has helped to bolster shares in the group, which continued to rise Tuesday on the Milan bourse and are trading at a premium to the purchase price ChemChina is paying for its stake.

Prime Minister Matteo Renzi has yet to comment publicly on the deal, but Tronchetti revealed he had been briefed on the eve of the signing. "He grasped that it is a great opportunity for Pirelli," the CEO said.

Renzi has made closer economic ties with China a priority of his term and has urged Italy to be more open to investment. He chose Beijing for his first foreign trip after coming to power last year and has defended a series of labour market reforms as vital to attracting foreign capital.

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