The Italian Connection: Brembo Buys a Portion of Pirelli

Google+ Pinterest LinkedIn Tumblr

Call it the Italian connection, as brake-maker Brembo has just bought a chunk of shares in Pirelli. As such, the move sees Brembo taking a 2.43% in the Italian tire brand.

Despite the surprise of the headline, the transaction has not a complete surprise to those following the actions of Brembo, as the braking brand announced last year its plans to go shopping in the corporate M&A realm.

Matteo Tiraboschi, Brembo’s Executive Deputy Chairman, even signaled last year that the the company’s appetite for acquisition could be as large Brembo itself.

While the investment in Pirelli isn’t quite as large as Brembo’s market capitalization, it still represents roughly €74 million being put into the tire brand by Brembo.

While Pirelli was quick to tout the news as a reinforcement of their current business operations and financial strength, the Italian brand has been quick to dismiss any rumors that Brembo and Pirelli could merge together

“There are no plans for a merger with Brembo. They made an investment, we are happy they did so,” Pirelli CEO Marco Tronchetti Provera said to the NASDAQ news service. “I knew about the Brembo move when it was done. I don’t see it as hostile. They have trust in us.”

There has been some consideration in investment circles that Pirelli and Brembo could merge to make an Italian powerhouse for high-end automotive parts and supply.

While the idea is interesting, and the automotive sector has certainly been hit hard by the transition from petrol to electric, neither Brembo nor Pirelli seems as affected by the industry trends. As we are fond of saying however, time will tell.

Source: Reuters & NASDAQ

Jensen Beeler

Despite his best efforts, Jensen is called one of the most influential bloggers in the motorcycle industry, and sometimes consults for motorcycle companies, whether they've solicited his expertise or not.