Italian tire giant Pirelli announced that despite opposition from its largest shareholder, the Chinese state-owned enterprise Sinochem, investors approved the company’s financial report from last year in a vote on Thursday, June 12. The vote results indicate that Sinochem no longer holds effective control over Pirelli.
According to a report from Reuters on June 12, Sinochem’s control over Pirelli has been restricted by the Italian government. Conflict arose between Sinochem, which owns 37% of Pirelli, and Pirelli along with its second-largest shareholder, Camfin. Camfin claimed that extensive Chinese investments in Pirelli would obstruct its business expansion in the United States.
In a statement, Pirelli confirmed that Sinochem, through its controlled entity MPI Holdings, was the only shareholder to vote against approving the 2024 financial report.
MPI, in another statement, stated that their vote against the report was solely due to disclosure of control rights, with no objections to the financial figures for Pirelli in 2024.
The shareholders’ meeting also approved the distribution of €250 million as dividends to investors, equivalent to €0.25 per share.
The United States is cracking down on Chinese technology in the automotive industry, banning the use of crucial software and hardware from China-controlled companies in connected cars driven on American roads. According to Reuters on Wednesday, June 11, the Italian government is seeking clarification from the United States on whether Pirelli, with Chinese investors, will face restrictions on doing business in the U.S.
Two years ago, the Italian government intervened to curb Sinochem’s influence over Pirelli and exercised the “golden power” law to protect the autonomy of Pirelli’s management, restricting Sinochem from accessing technical information collected by Pirelli’s smart tire sensors. The “golden power” law applies to companies identified by Italy as strategically important. Subsequently, Sinochem was under scrutiny for alleged violations of these restrictions.
On April 28 of this year, Pirelli issued a statement saying that out of the 15 board members, a decision was passed with 9 votes in favor confirming that Sinochem no longer holds control over Pirelli.
Pirelli is one of the world’s top five automotive tire manufacturers and has a 150-year history as a family business in Italy. The company supplies tires to manufacturers such as Ferrari NV, McLaren Automotive Ltd., and Bentley Motors Ltd. About 80% of the company’s revenue comes from the high-end product market.
Marco Tronchetti Provera, a veteran in the Italian business community and Vice Chairman of Pirelli, has increased his stake in the company and expressed a desire to raise his ownership to nearly 30%.