Pirelli considers making tyre division a stand-alone company

Milan, Italy -- Pirelli & C. SpA´s board of directors are considering spinning off the firm´s tyre business into a separate, publicly traded company, albeit still majority owned by Pirelli.

In disclosing its intention to explore options for a "better valuation" of its tyre activities, Pirelli´s board said market conditions in the segments where Pirelli Tyres is active are "favourable" and therefore constitute the basis for further growth. The directors cited the high-performance tyre sector, where they said the Pirelli brand is "recognised as a world leader."

The board has empowered Chairman Marco Tronchetti Provera and Managing Director Carlo Buora to "identify the best possible solutions for the realisation" of obtaining a better valuation of the tyre business.

The board said the actions to strengthen the firm´s finances and balance sheets will allow the company to focus on its various core businesses.

Analysts in Europe value the business at about $3500 million, according to various European media reports.

Pirelli´s tyre business represents about 80 percent of Pirelli & C.´s sales and 95 percent of operating earnings, according to the firm´s nine-month financial report. Tyre division sales for that period were about $3400 million.