Italian tyremaker giant Pirelli has moved to block a Chinese state-owned company from taking control of the legacy brand. On Sunday, Pirelli issued a statement to its investors wherein it said the Italian government had ruled that only Camfin – a company controlled by Pirelli boss Marco Tronchetti Provera – could nominate candidates to be its chief executive.
Chinese chemical giant Sinochem has been the largest investor in Pirelli since 2015. It owns a 37 per cent stake in the 151-year-old Milan-based company, following a 2017 listing.
In 2015, Pirelli was sold for $7.8 billion to a group of investors including ChemChina and Camfin. However, six years later, ChemChina was merged with the state-owned Sinochem. Apart from Sinochem, the Chinese government has an additional 9 per cent stake in Pirelli through its Silk Road investment fund.
The developments come in the light of Sinochem, earlier this year, informing the Italian government that it planned to renew and update an existing shareholder pact.
Afterwards, Italian Prime Minister Giorgia Meloni, taking evasive measures, examined the agreement under the “Golden Power Procedure” rules – aimed at protecting businesses that are strategically important to the country.
In a statement, Meloni’s office said the latest measures were “aimed at creating a network of measures to safeguard Pirelli’s independence and its management”.
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Italy working to slither out of BRI
Notably, Italy in 2019 became the only G7 country to join China’s highly controversial and ambitious Belt and Road Initiative (BRI). Since then, critics have argued that Rome may have served itself up on a platter to Beijing which could gain access to sensitive technologies and vital infrastructure for its own gains.
Meloni, however, has hinted that Italy intends to exit BRI. Her government intervening to limit the influence of a Chinese company in a legacy Italian brand was a test of resolve, experts argue, one that she may have passed.
China’s relationship with the West has been on a downward slope in recent times. Akin to most European nations, Italy understands that it cannot sever trade and business ties with China altogether as it would be economically unsustainable. However, it is seeking avenues to limit the influence of the Asian country on strategic assets.
Founded in 1872, Pirelli is one of Italy’s most storied companies. It specialises in high-end tyres for premium carmakers like Ferrari, Porsche and BMW and is the sole supplier of Formula One cars.
(With inputs from agencies)
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