Pirelli IPO Values Tiremaker at €6.6 Billion

Pirelli & Co. SpA is valuing itself at €6.50 per share or €6.5 billion ($7.7 billion) in an initial public offering that will begin trading on Oct. 4.

Pirelli intends to list as much as 40% of its shares in the IPO, which would raise €2.6 billion ($3.1 billion), the Financial Times reports.

The starting price is slightly below the company’s value when it went private two years ago in a €7.3 billion takeover led by state-owned China National Chemical Corp. (ChemChina) and involving Pirelli CEO Marco Tronchetti Provera. Since then the company has shifted its low-margin industrial tire assets into its Shanghai-based industrial business, FT notes.

The IPO will reduce ChemChina’s stake in Pirelli to less than 50%. The company’s Marco Polo holding company also has agreed to give up control of the tiremaker. Under new bylaws, Pirelli’s headquarters and assets cannot be transferred out of Italy without the support of 90% of total share capital.

Pirelli has forecast 9% annual growth through the end of the decade, about three times the projected growth of the global tire industry overall. FT says Tronchetti Provera will remain CEO until 2020.