Bekaert in talks to buy Pirelli steel cord business, says paper
According to an article published in Italian newspaper La Repubblica today, Pirelli intends to divest its ‘Steelcord’ business and has attached a €250 million price tag to it. The publication says Pirelli is now in the final stages of negotiations with Bekaert regarding a potential sale.
The business lies outside Pirelli’s stated focus on its core tyre business and it experienced declining sales in the previous financial year. According to Pirelli’s 2012 Annual Report, the Steelcord business achieved net sales of €97.6 million in 2012, 1.6 per cent of the Pirelli & C. SpA total and 19.5 per cent less than a year earlier. Belgian suitor Bekaert is one of the world’s largest steel wire and cord producers and generated sales of €3.5 billion in 2012.
“The steel cord market, which accounts for six per cent of net sales in the industrial segment, contracted sharply from its 2011 levels,” wrote Pirelli in its 2012 Annual Report. “This downturn was particularly pronounced in the EMEA markets where Pirelli has a greater presence, with net sales falling by ten per cent.”