- By Peter Hoskins
- business reporter
3 hours ago
Image source: Getty Images
Italy has prevented a Chinese state-owned company from taking control of tire manufacturer Pirelli.
The decision is part of the measures announced by the Italian government to protect Pirelli’s independence.
Beijing-controlled chemical giant Sinochem is Pirelli’s largest shareholder with a 37% stake in the 151-year-old Milan-based company.
This comes at a time when tensions between Beijing and the West are taking center stage as the US Secretary of State visits China.
On Sunday, Pirelli said in a statement to investors that the Italian government had decided that only Camfin – a company controlled by Pirelli CEO Marco Tronchetti Provera – could nominate candidates for the post of CEO.
Pirelli also said the government had decided that any changes to the company’s governance should be subject to official scrutiny.
This comes after Sinochem informed the Italian government in March that it intended to renew and update an existing shareholder pact.
Italian Prime Minister Giorgia Meloni’s government reviewed the deal under so-called “Golden Power Procedure” rules aimed at protecting companies seen as strategically important to the country.
In 2015, Pirelli was sold to a group of investors including ChemChina and Camfin for €7.1 billion (£6.1 billion; US$7.8 billion). Six years later, ChemChina merged with state-owned Sinochem. The Chinese government’s Silk Road investment fund also owns a 9% stake in Pirelli.
US Secretary of State Antony Blinken is in Beijing on the last day of a rare visit to China by such a senior Washington official.
Mr. Blinken’s trip comes at a time when relations between China and many Western nations have deteriorated in recent years over issues such as trade, Taiwan and security.
Before his visit, officials saw little chance of a breakthrough in the many disputes between the world’s two largest economies, which included Washington’s attempts to slow the development of China’s computer chip industry.