After Brembo recently bought a 2.43% stake in Pirelli, as part of a long-term investment, there has been a lot of speculation over an upcoming merger between the famous Italian manufacturer of automotive brake systems and the 5th largest tire manufacturer. However today we have an official statement made by Pirelli CEO to end the speculation.
Tronchetti Provera CEO of Pirelli said: “There are no plans for a merger with Brembo. They made an investment, we are happy they did so,” he said. Tronchetti Provera CEO of Pirelli said.
“I knew about the Brembo move when it was done. I don’t see it as hostile. They have trust in us.” He added
On the other hand, a merger between the two companies would have made a lot of sense, as they both operate in premium markets within the automotive industry; and we usually see products from both companies on the same vehicle.
Despite a very clear official statement indicating that Pirelli is not looking for a merger, some analysts believe that this merger would be beneficial for both companies, especially after the strong contraction of the two company’s respective market capitalizations and considering the premium positioning of the two companies.
Even if the combination would generate cooperation only on the cost base side, analysts think a potential merger between Pirelli and Brembo would make sense overall.
Moreover, a merger would also help Brembo and Pirelli face upcoming electric mobility challenges.
The reason why Brembo had purchased a stake in Pirelli was not announced, but according to what Matteo Tiraboschi, Executive Deputy Chairman of Brembo stated last year, Brembo would be looking for an acquisition target of “significant size” So again, a merger is still a possibility, despite the current denial.
As a reminder, Pirelli Company was founded in the Italian city of Milan in 1872, while the Italian company Brembo was founded in 1961.