Pirelli board chooses to focus on core businesses

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Pirelli & Cie SpA says its board of directors has "resolved upon a plan for separation of Pirelli RE" from the Pirelli Group of companies. Pirelli RE is a real estate fund asset management company.

"Such separation will occur through assignment of nearly all Pirelli RE shares held by Pirelli & Cie to ordinary and savings shareholders of Pirelli & C., and, therefore, via voluntary reduction of the corporate capital of Pirelli & Cie for an amount equal to the value of the Pirelli RE stake being assigned," says the company.

The transaction will result in a wider shareholder base for Pirelli RE, making it more appealing to possible takeover bids. It also will allow Pirelli to focus the company "on its core industrial activities in the tire industry, as delineated in the strategies of the 2009-2011 industrial plan."

Pirelli adds that the move "will improve the equity and financial structure of the Pirelli Group, will simplify the corporate structure of Pirelli & Cie, and will allow for a more immediate reading of the industrial strategy and the economic and financial data of the Pirelli Group by the market, with potentially positive returns in terms of further reduction of the holding company discount."

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