Italy May Restrict the Rights of Pirelli’s Chinese Shareholder
The Italian government may soon intensify its actions regarding tire manufacturer Pirelli’s plans for expansion in the US market. This concerns the potential freezing of voting rights of Sinochem, the Chinese state-owned corporation that owns 34% of the shares of the Italian tire maker.
Key points of the situation:
Obstacles for Business in the USA
For several months, Pirelli and its Italian partner Camfin have argued that Sinochem’s dominant position as the main shareholder complicates attempts to develop business in America. This is especially relevant against the backdrop of Washington tightening restrictions on the use of Chinese technologies in the automotive sector.
Italian “golden power” law grants the government authority to restrict shareholder rights in companies deemed to have strategic national significance. Pirelli falls under this category.
According to Reuters, Sinochem, aware of the tension, is open to exiting the capital. The company has already engaged BNP Paribas for consultations regarding the potential sale of its stake.
Search for a Compromise and Time Pressure
Italian Minister of Industry Adolfo Urso noted that negotiations are ongoing between Italian and Chinese shareholders of Pirelli. There are suggestions that an agreement may be reached whereby Sinochem would reduce its stake rather than exit the capital entirely.
Sinochem’s large stake in Pirelli has been a burden for the tire manufacturer for several years, and now the pressure to find a solution is only growing. In March, new US rules will come into effect, limiting the use of Chinese technologies in vehicles sold locally. This could be bad news for Pirelli, given that such a large part of the company is owned by a Chinese firm.
Deadline and Potential Government Intervention
As reported by the Financial Times, if no agreement is reached between Pirelli and Sinochem by January, the Italian government will consider the possibility of intervention. Such intervention could include suspending Sinochem’s voting rights to clear the way for Pirelli’s American strategy.
Sinochem initially acquired Pirelli in 2015 and two years later listed the car manufacturer in Milan. Previously, the Chinese company had already attempted to strengthen its control over the tire maker, prompting intervention by the Italian government in 2023.
This situation clearly demonstrates how geopolitical tensions between the West and China are increasingly influencing the corporate structures and strategies of global companies. For Pirelli, a brand with deep Italian roots and worldwide recognition in motorsport, the current shareholder conflict creates serious uncertainty about the future, especially in the key American market. The success or failure of negotiations this month could set the company’s development trajectory for years to come, and Italy’s decision will become an important precedent in applying mechanisms to protect the country’s strategic assets.