Chinese shareholder hampers Pirelli’s US expansion
Sinochem, Camfin shareholder pact to expire in May
Italy assessing fresh options to limit Sinochem’s influence
Sinochem open to selling Pirelli’s stake with premium
By Giulio Piovaccari and Giuseppe Fonte
MILAN, Jan 15 (Reuters) - Pirelli’s (PIRC.MI) top two investors, Italy’s Camfin and China’s Sinochem (600500.SS) , are set to let their shareholder agreement lapse, two sources close to the matter said, in a move that will trigger a new 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 U.S. expansion. Beijing-controlled Sinochem is Pirelli’s largest shareholder with a 34.1% stake while Camfin, the vehicle of Italian businessman Marco Tronchetti Provera, holds a 25.3% stake, with plans to increase it up to 29.9%.
<h3>SHAREHOLDERS CROSSED SWORDS OVER GOVERNANCE</h3>
Although bound by their mutual agreement, the parties have been in conflict for years over Pirelli’s governance.
Camfin and Pirelli itself complain that having a Chinese company as its main shareholder poses a hurdle to the group’s U.S. expansion, as Washington tightens restrictions on Chinese technology in the automotive sector. Italy’s Industry Minister Adolfo Urso has shared similar concerns.
The current agreement expires on May 17, just over a month before Pirelli investors are due to vote for the company’s new board.
Both Camfin and Sinochem are not planning to propose an extension of their agreement and are expected to officially inform the government, the two sources told Reuters, asking not to be named.
Camfin and Sinochem declined to comment.
<h3>GOLDEN POWER LEGISLATION PROTECTING STRATEGIC ASSETS</h3>
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. 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 safeguard its ability to compete in the U.S. market, the sources said. Although sources told Reuters earlier this month the Italian government could go as far as freezing Sinochem voting rights in Pirelli, Rome was still working to help parties find a more amicable arrangement, the sources said. Options on the table 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 disposing its shares if any offer came with a premium.
Sinochem has hired BNP Paribas to advise on a possible sale, a source earlier told Reuters.

Pirelli faces fresh Italian golden power scrutiny as Sinochem, Camfin prepare to end governance pact