Pirelli: Italy prevents China from controlling tyre giant

Pirelli: Italy prevents China from controlling tyre giant

Italy has taken steps to prevent a Chinese state-owned company from taking control of Pirelli, a huge manufacturer of tires.

The decision is one of a number of steps the Italian government has taken to safeguard Pirelli’s independence.

With a 37% stake in the 151-year-old Milan-based company, Beijing-controlled chemical giant Sinochem is Pirelli’s largest shareholder.

As the US secretary of state travels to China, tensions between Beijing and the West are at the forefront.

In a statement to investors on Sunday, Pirelli said that the Italian government had decided that only Camfin, owned by Pirelli’s boss Marco Tronchetti Provera, could nominate candidates for its chief executive position.

Additionally, Pirelli stated that the government had decided that any modifications to the corporate governance of the business should be subject to official scrutiny.

It occurred following Sinochem’s March announcement to the Italian government of its intention to renew and update an existing shareholder pact.

The agreement was looked at by the government of Italian Prime Minister Giorgia Meloni under the so-called “Golden Power Procedure” rules, which are meant to protect businesses that are thought to be strategically important to the country.

Pirelli was sold in 2015 for €7.1 billion (£6.1 billion; $7.8 billion) to a group of investors that also included Camfin and ChemChina. Six years later, state-owned Sinochem and ChemChina merged. Pirelli is also owned by the Silk Road investment fund of the Chinese government.

On the final day of his rare visit to China as a high-ranking Washington official, US Secretary of State Antony Blinken is in Beijing.

The trip of Mr. Blinken comes at a time when trade, Taiwan, and security issues have strained relations between China and many Western nations in recent years.

Prior to his visit, officials were skeptical that Washington’s efforts to halt China’s computer chip industry would result in a resolution to the numerous disagreements that exist between the world’s two largest economies

What effect Pirelli: Italy blocks Chinese control of tyre giant

The Italian government’s decision to block a Chinese state-owned company from taking control of tyremaker Pirelli is likely to have a number of effects.

First, it could damage relations between Italy and China. The Chinese government has been critical of the decision, and it is possible that this could lead to retaliatory measures against Italian companies.

Second, it could make it more difficult for Chinese companies to invest in Italy. The Italian government has said that it is concerned about the potential for Chinese companies to gain control of strategic assets, and this decision could make it more difficult for Chinese companies to invest in Italy.

Third, it could lead to increased scrutiny of Chinese investments in other European countries. The Italian government’s decision could prompt other European governments to take a closer look at Chinese investments in their countries.

Fourth, it could have a negative impact on the Italian economy. Pirelli is a major employer in Italy, and the decision to block the Chinese takeover could lead to job losses and a decline in investment.

The full impact of the Italian government’s decision is still unclear, but it is likely to have a significant impact on relations between Italy and China, as well as on the Italian economy.

Here are some additional details about the potential effects of the decision:

  • Damage to relations between Italy and China: The Chinese government has been critical of the decision, and it is possible that this could lead to retaliatory measures against Italian companies. For example, the Chinese government could block Italian companies from bidding on government contracts or make it more difficult for them to do business in China.
  • Increased scrutiny of Chinese investments in other European countries: The Italian government’s decision could prompt other European governments to take a closer look at Chinese investments in their countries. This could lead to increased regulation of Chinese investments or even outright bans on some types of investments.
  • Negative impact on the Italian economy: Pirelli is a major employer in Italy, and the decision to block the Chinese takeover could lead to job losses and a decline in investment. This could have a negative impact on the Italian economy, which is already struggling to grow.

Overall, the Italian government’s decision to block the Chinese takeover of Pirelli is a significant development with the potential to have far-reaching consequences. It remains to be seen how the Chinese government will respond, and what the long-term impact of the decision will be on relations between Italy and China, as well as on the Italian economy.

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