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The Italian government, Pirelli and its shareholders are searching for ways to end Sinochem’s involvement in the Milan-based tyremaker, which could be banned from the US due to the Chinese chemical group’s shareholding.
Rome is mulling a fresh intervention as Washington’s ban on Chinese-backed hardware and software that interact with US cars comes into effect in March, according to people familiar with the discussions.
Sinochem is Pirelli’s largest shareholder with a 37 per cent stake, and the Italian tyremaker could lose access to the US, which accounts for a fifth of its revenues.
In the US, Pirelli primarily sells its flagship premium tyres with embedded proprietary technology. Over recent months, US officials have pressured Rome to limit Sinochem’s influence over the company, according to several people familiar with the matter.
Although Pirelli executives have sought to end the long-running saga, presenting Sinochem with several options including a sale of its stake, executives at the Chinese state-owned group did not immediately engage, according to the people. However, Sinochem last month appointed BNP Paribas as advisers to explore sale options, the people added.
Pirelli and Sinochem declined to comment.
If both sides to fail to come to a compromise in January, the “last resort” would be for the Meloni government to suspend Sinochem’s voting rights, under its “golden powers” legislation that allows it to impose limitations or veto investments by foreign companies in strategic assets.
However, industry minister Adolfo Urso said on December 30 that the Italian government had worked to bring the parties back to the negotiating table: “It is positive that the parties have resumed their dialogue now.”
In November Urso vowed to help Pirelli, saying Italy would “do its part to make sure the company isn’t cut out from international markets”.
State-backed ChemChina, which received final approval to merge with Sinochem in 2021, bought Pirelli in 2015 and relisted the tyremaker in Milan in 2017.
Tensions flared between the Italian group and Sinochem after the Chinese shareholder sought to tighten its grip over the tyremaker after the merger.
Pirelli’s former chief executive Marco Tronchetti Provera, whose holding company Camfin is the second-largest shareholder in the tyremaker, sounded the alarm over Beijing’s interference in its management and governance.
This prompted Rome’s direct intervention in 2023 under its golden powers rules.
Aimed at protecting “strategically relevant information and the company’s knowhow”, they included limiting information access and sharing between Pirelli and Sinochem, and the requirement of a four-fifths majority for some “strategic” board decisions.
In April 2025, Pirelli’s board stripped Sinochem of its control over the tyremaker, raising tensions between Chinese and Italian shareholders. Italy has been careful not to antagonise the Chinese government further, and had been hoping to find an amicable solution to the dispute.
It offered the Chinese an olive branch in September by dropping an investigation into the Sinochem-owned China National Rubber Company, for allegedly violating Rome’s 2023 measures, according to the people close to the talks.
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