Italy has taken action to prevent a state-owned Chinese corporation from taking over Pirelli, the world’s largest tyre manufacturer.
The choice is a component of the actions the Italian government has announced to safeguard Pirelli’s independence.
Sinochem, a Beijing-controlled chemical juggernaut that has a 37% stake in the 151-year-old Milan-based company Pirelli, is the largest shareholder.
As the US secretary of state visits China, tensions between Beijing and the West are in the spotlight.
Pirelli announced to investors on Sunday that the Italian government had decided that only Camfin, a business owned by Pirelli’s CEO Marco Tronchetti Provera, may propose candidates for the position of chief executive.
Additionally, Pirelli stated that any modifications to the corporation’s corporate governance will be subject to governmental review.
It followed Sinochem’s March announcement that it would be renewing and updating an existing shareholder agreement.
The government of Italian Prime Minister Giorgia Meloni investigated the arrangement in accordance with the “Golden Power Procedure” regulations, which are intended to safeguard companies that are thought to be strategically significant to the country.
Pirelli was sold to a consortium of investors in 2015 for €7.1 billion (£6.1 billion; $7.8 billion), including ChemChina and Camfin. ChemChina merged with state-owned Sinochem six years later. A further 9% of Pirelli is owned by the Silk Road Investment Fund of the Chinese government.
On his penultimate day of a rare trip to China by a senior Washington official, US Secretary of State Antony Blinken is in Beijing.
The timing of Mr. Blinken’s visit coincides with a recent deterioration in ties between China and several Western countries over topics including trade, Taiwan, and security.
Before his arrival, authorities believed there was little hope of a resolution to the numerous disagreements between the two largest economies in the world, including Washington’s efforts to impede China’s computer chip industry’s growth.
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