Italian tyremaker Pirelli to sell steelcord business to Belgium's Bekaert

Italian tyremaker Pirelli & C SpA today said that it has struck a deal to sell its steelcord business to Belgium's Bekaert for around €255 million ($349 million).

As a part of the sale, both companies will enter into a long-term supply agreement and joint product development agreement.

Pirelli said that the sale will allow it to exit a business where it lacks competitive scale and instead focus on its higher-margin premium tyre business.

In March last year, Pirelli had hired banks HSBC and Intesa Sanpaolo to review strategic options for its steelcord business, including a sale.

The sale includes Pirelli's steelcord business personnel, assets and manufacturing sites in Italy, Romania, Turkey, China and Brazil. The deal includes all of the personnel and assets of the respective entities.

Steel cord represented 1.6 per cent of Pirelli's global sales last year, or around $125 million. The transaction is estimated to add approximately €300 million to Bekaert's consolidated sales on an annual basis.

The deal has an enterprise value of €255 million and is subject to customary closing conditions.

Founded in 1872 and listed on Milan Stock Exchange, Pirelli is one of the top global tyre manufacturers with annual sales of over €6.07 billion.

The Milan-based company has 22 factories across the world, on four continents, and operates in more than 160 countries.