By Giulio Piovaccari and Giuseppe Fonte
Milan — Pirelli’s top two investors, Italy’s Camfin and China’s Sinochem, are set to let their shareholder agreement lapse, according to two sources close to the matter, a move that would trigger fresh intervention by the Italian government on the tyremaker’s governance.
The decision not to renew the pact comes as the government assesses options to limit Sinochem’s influence over Pirelli, or even turn it into a passive shareholder, as part of efforts to facilitate the tyremaker’s US expansion.
Beijing-controlled Sinochem is Pirelli’s largest shareholder with a 34.1% stake while Camfin, the vehicle of Italian businessman Marco Tronchetti Provera, owns 25.3% and plans to increase that to as much as 29.9%.
Hurdle to expansion
Although bound by their mutual agreement, the parties have been in conflict for years over Pirelli’s governance. Camfin and Pirelli say that having a Chinese company as its main shareholder poses a hurdle to the group’s US expansion as Washington tightens restrictions on Chinese technology in the automotive sector.
Italy’s industry minister Adolfo Urso has shared similar concerns.
The present agreement expires on May 19, just over a month before Pirelli investors are due to vote for the company’s new board.
Camfin and Sinochem aren’t planning to propose an extension of their agreement and are expected to officially inform the government, the two sources said, asking not to be identified.
Camfin and Sinochem declined to comment.
Rome first intervened in 2023 to set limits on Sinochem and preserve Pirelli’s autonomy, under so-called ‘golden power’ legislation aimed at shielding the national interest. According to the government-set terms, Pirelli’s Italian shareholder has the right to appoint the company’s CEO and set strategic decisions, while Sinochem should refrain from having steering influence on the company.
Italy also ruled the parties should notify the government of any changes to their shareholder agreement, including a decision not to renew it.
New framework
The lapse of the agreement will prompt Rome to launch a new golden power review to set conditions for Pirelli’s next governance framework and help the group to safeguard its ability to compete in the US, the sources said.
Though sources said earlier this month that the Italian government could go as far as freezing Sinochem voting rights in Pirelli, officials were still working to help parties find a more amicable arrangement, the sources said.
Options include a sale of Sinochem’s stake in Pirelli, one of the sources said. Last year Reuters reported the Chinese state-backed group could consider selling its shares if any offer came with a premium.
Sinochem has hired BNP Paribas to advise on a possible sale, a source said.
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