The EU Court of Justice confirmed the decisions of the EU Tribunal and the EU Commission, rejecting the appeal presented by Pirelli on the European cartel involving the former subsidiary Prysmian.
The matter dates back to 2014, when the European Commission convicted Prysmian (controlled by Pirelli from 1999 to 2005), Nexans, Goldman Sachs and eight other companies for having managed a cartel in the electric cable sector for ten years. Overall, the fine amounted to 301,6 million euros, of which 67,31 million pertaining to Prysmian, and to Pirelli jointlydespite the fact that the latter had no involvement in the cartel's activities.
The company led by Marco Tronchetti Provera had filed an appeal arguing that should not have been held responsible for the former subsidiary. According to Pirelli, the company directly involved in the cartel, i.e. Prysmian, should have assumed sole responsibility.
In application of the so-called “parental liability” principle, Pirelli's arguments were rejected by the judges of Luxembourg, according to which there is already a consolidated jurisprudence which provides that violations in the field of competition by the subsidiaries can be attributed to the parent company.
Following the ruling, Pirelli reassured its investors, emphasizing that the decision of the EU Court will have no economic impact on the company. The Bicocca group "had in fact already made appropriate provisions in its provisions for risks and charges in relation to potential liabilities relating to this proceeding". Six years ago, Pirelli had "already deposited a bank guarantee of 33,655 million plus interest in favor of the EU Commission".
From a financial point of view, in the event of payment of the fine by 31 December 2020, the net cash flow target communicated in August and between approximately +190 and approximately +220 million euros, "will be respected in the lower part of the range ”, the company said.
Finally, Pirelli recalls that it has been pending since 2014 "a judgment filed by Pirelli before the Court of Milan aimed at obtaining the assessment and declaration of Prysmian's obligation to hold Pirelli harmless from any claim relating to the cartel, including the fine imposed by the European Commission”.
In Piazza Affari, on a fiery day for the Ftse Mib (-3,9%) the Pirelli stock yields 5,68%.
