Sinochem’s rejection of Pirelli’s proposal jeopardizes its U.S. market ambitions and raises the risk of Italian government intervention.
Pirelli’s CEO has warned that a failure to reach an agreement with its Chinese shareholder, Sinochem, could significantly threaten the company’s global growth and technological future. The governance dispute is particularly jeopardizing its plans for expansion into the strategically important U.S. market and has prompted concerns over potential intervention by the Italian government.
Governance Crisis at Pirelli
Italian tire manufacturer Pirelli is facing a serious governance crisis after its main Chinese shareholder, Sinochem, rejected a proposed solution aimed at resolving structural issues. The dispute could have far-reaching consequences for the company’s strategic ambitions, particularly its expansion into critical markets such as the United States.
CEO Warns of Increasing Risk
In an interview with Corriere della Sera, Pirelli CEO Andrea Casaluci emphasized the urgency of the situation, describing it as high-risk if left unresolved. He stressed that the company’s ability to develop key technologies and expand globally—especially in the U.S.—is under direct threat.
“Our goal is to identify solutions that enable Pirelli to operate freely in all global markets, particularly in the United States, with no constraints—focusing solely on our industrial development.”
— Andrea Casaluci, CEO of Pirelli
Concerns Over Chinese Ownership
Previously, both Pirelli and its second-largest shareholder, Italian investment firm Camfin, had expressed concerns that Sinochem’s ownership could hinder expansion plans in the U.S. Some American lawmakers have opposed projects involving Chinese entities, particularly in sensitive sectors.
Confidential Proposal Rejected
Pirelli had submitted a proposal to address the governance concerns—although the company has not disclosed specific details. Nonetheless, Sinochem firmly rejected the plan earlier this month, worsening tensions between the stakeholders.
North America’s Strategic Importance
Currently, more than 20% of Pirelli’s total revenues come from the North American market. This share rises to 40% for high-value product lines. Any disruption to its U.S. presence would therefore have immediate financial and strategic implications for the company’s global outlook.
Innovation and R&D at Risk
Casaluci further noted that without a mutually agreed governance model, the development of key technologies could stall—jeopardizing future growth not only abroad but also in Pirelli’s home country. He reaffirmed the group’s commitment to expanding its research and development operations within Italy.
Possible Government Intervention
While Pirelli seeks constructive dialogue with Italian authorities, Sinochem has independently submitted its own governance proposal to the Italian government. Notably, this move was made without prior consultation with Pirelli’s management and has sparked concern over coordination between major shareholders.
Golden Power and National Security Tools
The Italian government holds so-called “Golden Power” rights, which allow it to veto or place conditions on foreign investments in strategic national sectors. This legal mechanism could potentially be invoked to limit or even block Sinochem’s influence in Pirelli, given the rising geopolitical sensitivities.
Pirelli and Sinochem Remain Silent
As of now, neither Pirelli nor Sinochem has issued any official comment regarding the CEO’s statements or the ongoing governance standoff, despite rising media attention and market speculation.
