Pirelli parent looks for more profitability from its tire division

Feb. 24, 2006

The Board of Directors of Pirelli & Cie SpA is taking a keen interest in Pirelli's tire division.

The board recently resolved to undertake procedures aimed at "arriving at a better valuation of the activities of its tire division." This includes a possible listing on the Milan Stock Exchange.

The board wants Chairman Marco Tronchetti Provera and Managing Director Carlo Buora to do this while maintaining Pirelli & Cie's majority stake in the Pirelli Tyres division.

Pirelli says the conditions of the main markets and segments in which the Group's tire sector is active continue to be favorable, especially in the high-performance segment. "This constitutes the basis for further growth compared with that registered by Pirelli Tyres in recent years."

The board also has approved a plan "for the further concentration of resources in the Group's strategic activities through the disposal of financial participations for a sum of approximately 400 million euros" ($480 million), equal to about half of this portfolio.

The strengthening of finances and balance sheets resulting from the operations outlined above will allow the company to fully focus on its various core businesses, adds the board.