Pirelli deal strengthens distribution network in Brazil

ERJ staff report (TB)

Sao Paulo, Brazil – Pirelli Tyre S.p.A. has struck a preliminary deal to strengthen its captive distribution network throughout Brazil, reports Tire Business. One of the country's leading wholesale and retail groups will be integrated into Pirelli’s own Pneuac distribution subsidiary.

With this agreement, Pirelli anticipates Pneuac's annual sales will grow to $535m (€404m) by 2014.

The deal involves Pirelli, the Comolatti Group—through the Distribuitora Automotiva company, owner of the Abouchar tire sales network—and Campneus Líder de Pneumáticos Ltda., which have agreed to integrate Abouchar's 29 points of sale with Pirelli's network of 104 Pneuac outlets.

Financial terms were not disclosed.

Pirell said its goal with this deal is to reinforce its leadership on the Brazilian market through greater direct control of the commercial network. With this initiative, Pirelli will focus on areas with the greatest growth in the premium segment.

The deal involves a swap of assets, with Distrbuidora Automotiva acquiring a stake in Pneuac from Pirelli, and in turn conferring to Pneuac the Abouchar points of sale.

At the conclusion of the operation, Pirelli, Distribuidora Automotiva and the Faria da Silva family, minority stakeholder in Campneus, will be represented in the company capital of the new Pneuac, Pirelli said. Pirelli will maintain majority control, and Ivo Giunti Yoshioka, head of Pneuac for Pirelli since 2009, will assume the role of CEO.

This is Pirelli's second major move in a year involving its Brazilian retail holdings. Last July it acquired 60 percent control of Campneus Líder de Pneumáticos, one of Brazil's largest tire distributors with 54 retail outlets in seven Brazilian states.

Established in 1927 and acquired in 1981 by the Comolatti Group, Abouchar is one of the main re-sellers in Pirelli's official sales' network in Brazil, which has approximately 600 points of sale throughout the country.

With 29 retail points of sale and nine distribution centers located in eight Brazilian states, Abouchar markets a wide range of tires and offers automotive services. The stores will retain the name.

The agreement will be reviewed by Brazilian antitrust authorities.

Posted With a 56-year history and more than 4,000 employees, Comolatti Group has a strong presence in the distribution of auto parts through the Distribuidora Automotiva company, with 22 distribution centers in the main Brazilian cities.