According to Italian media reports, the board of directors of Pirelli is expected to approve an agreement among shareholders next Monday, April 28, which will confirm that the group’s largest investor – Sinochem – will not be able to exercise control over the tire manufacturer.
There has been a longstanding disagreement between Sincochem and Italian shareholders of Pirelli on corporate governance issues, with Sinochem Group becoming a major obstacle for Pirelli to expand its business in the United States.
Under the agreement, Sinochem Group will retain its 37% stake in Pirelli, but will no longer have control over the company in terms of regulation.
The report indicates that the agreement will stipulate that Sinochem Group cannot dominate the governance of Pirelli, as the company’s decisions should be made by the management.
Pirelli is one of the world’s top five automotive tire manufacturers and has a 150-year history as a family business in Italy. Previously, Sinochem Group was accused of violating provisions related to protecting Pirelli’s autonomy, leading the government led by Italian Prime Minister Giorgia Meloni to initiate a review last November. The review determined that Pirelli’s “Cyber Tyre,” which collects vehicle data using chip technology, is a national strategic key technology. Improper use of this technology could pose significant risks to user data security and national security.
The Italian government has taken measures to limit Sinochem Group’s influence over Pirelli and oversee it, including requiring strategic decisions of the board of directors to be approved by a qualified majority (at least 80%) of directors.
Sinochem Group insists that it has always respected the measures set by the Italian government.
The board of directors of Pirelli will convene a meeting next Monday to approve the company’s financial report for 2024. The board meeting was originally scheduled for the end of March but was postponed for a month due to long-standing tensions between major shareholders.
Earlier this month, Pirelli announced that in order to alleviate the tense situation caused by Sinochem Group as the largest shareholder, it has suspended further investment plans in the United States.