Italian tyre maker Pirelli’s board has approved an accord between shareholders to establish that the group’s largest investor, China’s state-owned Sinochem, does not exercise control over the tyre maker. This move might make it easier for the tyre maker to expand in the US.
The board majority approved the end of Sinochem’s control, with 9 out of 15 directors voting in favour, citing international accounting standards. Chairman Jiao Jian and four other Chinese directors cast the five dissenting votes, while another director abstained.
Pirelli’s Chinese and Italian shareholders have been at odds over the group’s governance, with the company and its second-largest investor Camfin saying Sinochem was posing a hurdle to ambitions to expand in the US, one of its key markets.
In 2023, the Italian government intervened to curb state-controlled Sinochem’s influence in Pirelli and protect the autonomy of its management under so-called “golden power” legislation for companies deemed of strategic importance.
“The decision regarding the absence of control of the shareholder Sinochem represents a first, but not decisive, step on the path to the necessary adjustment of company governance to regulatory constraints in the USA,” the company said in a statement.
“Management therefore reaffirmed it will continue its dialogue with the main shareholders to align Pirelli’s governance with American regulations, particularly regarding connected vehicles, in the interests of the company and all its stakeholders,” it added.
Sinochem, which holds a 37% stake in Pirelli, said it was firmly opposed to the board’s decision, arguing the golden powers ruling did not envisage any clause stripping it of control.
Pirelli, a key player in the high-value tyre segment, noted that the US is crucial for developing and distributing its Cyber Tyre technology.
The company also declared its financial results for 2024. Pirelli’s 2024 consolidated net profit rose 1% to EUR500 million, compared with EUR495.9 million in 2023.
Pirelli confirmed its 2025 targets despite a “high level of uncertainty surrounding US tariffs” and said it has defined a mitigation plan should the announced measures come into effect.