Significant events subsequent to the end of the year

On January 9, 2015 Pirelli signed a contract for a new revolving credit facility (euro 800 million) and a term loan multicurrency (euro 200 million) for a total value of euro 1 billion and five-year term. The contract replaces the existing revolving credit facility for euro 1.2 billion maturing in November 2015 which therefore is being extinguished in advance. In addition, on February 13, 2015 an additional contract having substantially the same conditions of the abovementioned credit facility and for a total value of euro 200 million and five-year was signed.

On January 27, 2015 the Special Meeting of the holders of savings shares of Pirelli & C. S.p.A., appointed Angelo Cardarelli as common representative for the years 2015, 2016 and 2017 in place of Professor Giuseppe Niccolini.

On February 6, 2015 Pirelli and Bekaert announced the closing of the disposal of Pirelli steel cord activities in Turkey (Izmit) to Bekaert. On March 27, 2015, with the disposal of the steel cord in China (Yanzhou), the transfer of all steel cord activities from Pirelli to Bekaert was completed. In line with what was comunicated to the market in February 2014 on the occasion of the announcement of the transaction, the total value (enterprise value) of 100% of steel cord activities is confirmed at euro 255 million.

On February 12, 2015 the Board of Directors of Pirelli & C. S.p.A. examined the preliminary, unaudited results of 2014 operations.

On March 22, 2015 China National Tire & Rubber Co. (CNRC), a subsidiary of ChemChina's (ChemChina), Camfin S.p.A. (Camfin) and shareholders of Camfin (Coinv S.p.A. and Long-Term Investments Luxembourg S.A.) signed a binding long-term industrial partnership agreement related to Pirelli.

The partnership has a stated objective of strengthening the development plans of Pirelli, the presence in the strategic geographical areas and the doubling of volumes in the Industrial segment (from about 6 million to about 12 million tires) through the future integration of CNRC and Pirelli’s Industrial tire activities.

Continuity and autonomy of the current managerial structure of Pirelli Group are the key elements of the agreement.

The transaction provides for the appointment of the President by CNRC and the permanence of Marco Tronchetti Provera as CEO of Pirelli.

Pirelli headquarter and know-how will remain in Italy: reinforced majorities are required to authorize the transfer of both the Headquarter and Pirelli know-how to third parties.

The agreement foresees:

  • the purchase by an Italian company of the newly established company (Bidco), the latter being indirectly controlled by CNRC in partnership with Camfin through two newly established Italian companies (Newco and Holdco), that will represent Camfin’s equity investment in Pirelli’s share capital;
  • the immediate reinvestment of a share of sales revenues by Camfin;
  • upon completion of the purchase, a Public Mandatory Takeover Bid for the remaining ordinary share capital of Pirelli at euro 15.00 per ordinary share and a Public Voluntary Takeover Bid for all the savings capital of Pirelli at euro 15.00 per savings share, on the condition that not less than 30% of the savings capital is achieved. Both mandatory and voluntary Opa will be launched by Bidco in order to proceed to the delisting of Pirelli;
  • the payment of 2014 dividends before the purchase by Bidco of Pirelli shares held by Camfin.

The completion of the transaction is subject to the conditions typical of a transaction of this type and is expected in the summer of 2015 upon the approval by antitrust and other relevant authorities.

Extracts of the shareholders’ agreements related to the abovementioned partnership are available on Pirelli’s website.