Volatility on the stock exchange for Pirelli shares, which suddenly collapsed from 4.77 to 4.6 euros in the wake of rumors according to which Sinochem Holdings is considering selling its 37% stake in the Italian tire manufacturer.
The stock was also temporarily suspended, to then re-enter trading with a drop of around 2%. Pirelli is currently traveling down 1% to 4.65 euros.
The possible sale by Sinochem Holding is reportedly due to the Chinese state-owned conglomerate’s attempt to streamline its global portfolio of assets. Some potential buyers, including private equity firms, have already expressed a preliminary interest in the Italian company.
Sinochem could also sell a partial stake or defer the divestment over time. Chinese state-owned enterprises, including the oil-to-chemicals group that controls Pirelli, have been instructed by the government to review their assets and divest those outside their core businesses. A trend that could put an end to years of large-scale acquisitions abroad, such as the one that led to the acquisition of Pirelli for around $8 billion in 2015.
Pirelli currently has a market capitalization of 4.65 billion euros, with a negative net financial position of 3.4 billion as of September 30, 2022. The company will release the results as of December 31 on February 22.