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Prysmian Group

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Prysmian S.p.A.
Company typeSocietà per azioni
BIT: PRY
FTSE MIB Component
IndustryManufacturing, technology
Predecessors
General Cable[1]
Founded1879 in Milan, Italy (as Pirelli Cavi e Sistemi)
HeadquartersMilan
Area served
Worldwide
Key people
Massimo Battaini (CEO), Francesco Gori (Chairman)
ProductsTelecommunications and electric power cables
Revenueover €16 billion [2]
504 Million [3]
Number of employees
30,000 (2022)[4]
Websitewww.prysmian.com

Prysmian S.p.A. is a multinational company with headquarters in Milan, Italy, specialising in the production of electrical cable for use in the energy and telecom sectors and for optical fibres. Prysmian is present in North America with 23 plants, 48 in Europe, 13 in LATAM, 7 MEAT, 13 APAC.

It is the world leader in the production of cables for wind farms.[5][6] The company is listed on the Borsa Italiana in the FTSE MIB index.

On 4 December 2017, it took over 100% of the General Cable group in the US, to then complete the merger by incorporation the following year, after the antitrust approval by the respective countries.

History

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The beginning

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The company originated in 1879 as Pirelli Cavi e Sistemi. In 1881, it secured a contract to produce submarine telegraph cables for military engineering.[7]

In 1886, it opened a submarine cable production plant in La Spezia.[8] It later helped to lay the entire Italian telegraph network on behalf of the Italian state-owned company Telegrafi dello Stato, and to install the electrical grid for domestic use in Milan.[9] It also laid telegraph cables in the colonies of Italian East Africa.[9]

In 1925, it produced 5,150 km of submarine telegraph cabling for Italcable for communications between Italy and South America. Its collaboration with the Italian government continued with the laying of cables for the Italian interurban telephone network.

Prysmian

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In 2005, Prysmian S.r.l. was created by Goldman Sachs after acquiring Pirelli & C. S.p.A's Cables and Systems business. After restructuring the organisation of the group's internal activities, the company decided to sell down its investment in the cable market. The figure negotiated was EUR 1.3 billion: Goldman Sachs gave Pirelli 225 million and the rest (more than one billion) was a debt that would be paid off the back of the new business.[10] The company, led by Valerio Battista from 2005, was then a public company.[11]

Since 3 May 2007, it has been listed on the Milan Stock Exchange and on 24 September 2007 it joined the S&P MIB index of the biggest Italian companies.

At the end of 2009, Goldman Sachs decided to sell down its stake, which was completed in March 2010.[12][13]

In February 2011, Prysmian successfully made a takeover bid of EUR 840 million for Dutch company Draka, with headquarters in Eindhoven, which at the time was fourth in the world in the cable and optical fibre sector.[14]

In December 2017, it bought the American (and rival) company General Cable based in Kentucky. A transaction of almost three billion dollars, consisting of equity (1.5 billion) and financial debt. This merged the leading cable-making company in the world in terms of revenue (Prysmian) and the fourth (General Cable), creating a group with a revenue of EUR 10 billion, EBIDTA (earnings before interest, taxes, depreciation and amortisation) of EUR 840 million and over 28,000 employees.[15]

Acquisition of General Cable

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The General Cable group was valued at 3 billion dollars with a price premium of approximately 81% to General Cable's share value on the last day of trading.[16]

The acquisition was unanimously approved by the two Boards of Directors and would create a company present in 50 countries with 31,000 employees, which could generate revenue of 11 billion dollars a year, based on estimates from the 2017 financial statements. The integration was expected to cost 220 million dollars.[17] The price per share paid to General Cable was 30 dollars, versus a Prysmian dividend that was halved in 2011 after the acquisition of Draka, and stable at 43 cents per share. The General Cable group has one billion dollars of debt.[17]

Already the leading cable company in the world, with such "pro-forma" earnings, it would become twice as large as its second main competitor. Prysmian declared that it expects to increase its capital by more than 500 million in light of further acquisitions.[18]

The transaction was subject to approval by the antitrust authorities of the two countries.[19]

Its completion would create a market concentration in a strategic sector for public safety and economic development, which was already established by no more than ten competitors across Italy, the US and China. Other oligopolies exist in the fixed and mobile telephony sectors in various countries, partly due to the existence of natural monopolies.

Activity

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The company is the global leader in the cable systems sector. Specifically, Prysmian produces and lays underground and submarine cables for the transmission and distribution of electricity, as well as specialised cables for use in various industrial contexts, and medium- and low-voltage cables for construction and infrastructure. For telecoms, the Group produces copper cables, optical cables and optical fibre cables for the transmission of data, video and sound.

On the customer's request, Prysmian also Designs and produces key systems and takes care of post-installation maintenance.

Every year, Prysmian invests more than EUR 100 million[20] in research and development. This has allowed the Group to develop innovations like BendBrightXS 180μm,[21] the narrowest bend-insensitive optical fibre, and FlexRibbon,[22] which, with 6,912 fibres, is the optical cable with the highest number of fibres in the sector.

The company also developed the P-Laser technology[23] for cabling systems, which combines greater transmission capacity and eco-sustainability, using 100% recyclable materials and cutting carbon emissions by 40%.

By 2022, Prysmian has planned to invest around EUR 450 million[24] to net-zero the Group's CO2 emissions and improve the sustainability of its supply chain. An ambitious commitment, aligned with the objectives of the Paris Agreement, which would be executed with support from the non-profit organisation Carbon Trust.

For 2021, Prysmian confirmed the launch of the new Leonardo da Vinci cable-laying vessel,[25] which will be the longest in the world at 171 metres.

In Italy, Prysmian is active in Merlino, Giovinazzo, Pignataro Maggiore, Quattordio, Livorno, Pozzuoli and Battipaglia.

Since the acquisition of General Cable, it is present in more than 50 countries with 104 facilities and over 28,000 employees.[26]

Shareholders

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Nasdaq, January 2021.[27]

See also

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References

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  1. ^ "The History of Our Group | Prysmian Group".
  2. ^ "2022 Integrated Report" (PDF). Prysmian Group. Prysmian Group.
  3. ^ "2022 Integrated Report" (PDF). Prysmian Group. Prysmian Group.
  4. ^ "2022 Integrated Report" (PDF). Prysmian Group. Prysmian Group.
  5. ^ Prysmian_Annual_Report_2019_April_3_1, Prysmian Group
  6. ^ Wind Energy Cables Market Global Research and analysis 2020 to 2025, mccourier.com
  7. ^ Wind Turbines, Prysmian Group
  8. ^ Pirelli and telecommunications: the history of the Città di Milano cable-lying ship, Fondazione Pirelli
  9. ^ a b Pirelli, Stories of People and Inventions: Emanuele Jona, Fondazione Pirelli
  10. ^ Prysmian History, Prysmian Group
  11. ^ The way of a public company – Interview with Mr. Battista, Prysmian Group
  12. ^ UPDATE 2-Prysmian shares up as Goldman sells stake, Reuters
  13. ^ Goldman Sachs sells Prysmian, City A.M.
  14. ^ Prysmian S.p.A. holds 100% of the Draka Holding N.V. Shares – Squeeze-out completed, Prysmian Group
  15. ^ Prysian completes the acquisition of General Cable, Prysmian Group
  16. ^ Italy's Prysmian digs deep to buy General Cable in $3 billion deal, Reuters
  17. ^ a b Prysmian to acquire General Cables for $30.00 per Share in Cash, Prysmian Group
  18. ^ Annual shareholders' meeting, Prysmian Group
  19. ^ Creating the World's Leading Cables & System Company, Prysmian Group
  20. ^ Italy: EUR 100 million to Prysmian Group for research and development in Europe, European Investment Bank
  21. ^ Prysmian intros world first bend-insensitive 180 μm fibre, Optical connections
  22. ^ Prysmian unveils bend-insensitive 6,912-fiber ribbon cable, Structured Cabling News
  23. ^ Prysmian Relaunches P-Laser, the Cable for the Energy Transition, PR Newswire
  24. ^ Prysmian to spend 450 million euros by 2022 to accelerate net-zero emissions plan, Reuters
  25. ^ Prysmian Group presents an advanced cable laying vessel Leonardo da Vinci, Sea Wanderer
  26. ^ Global Presenc e, Prysmian Group
  27. ^ Ownership Structure of the Group, Prysmian Group
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