Pirelli marks a new era for its corporate governance: control exercised by sinochem, the largest Chinese shareholder with a 37% stake, is officially ceased. The communication comes at the end of the Board of Directors meeting on Monday 28 April 2025, during which it was confirmed that “control of Sinochem has ceased” in accordance with the international accounting standard IFRS 10, with the favorable vote of the majority of the directors.
The board of directors of the historic tire manufacturer has also approved the 2024 budget, with a favorable vote of nine out of fifteen councilors. Voting against were President Jiao Jian and councilors Chen Aihua, Zhang Haitao, Chen Qian, Fan Xiaohua, while Tang Grace abstained. The proposal of dividend It was also approved, with a distribution equal to 0,25 euros per share (for a total of 250 million euros), and will be paid starting from 25 June 2025. The shareholders' meeting is scheduled for 12 June 2025.
The End of Sinochem Control: What Happens Now?
Pirelli's decision to separate from Sinochem's control comes after a measure by Consob, which had asked the Board of Directors to evaluate the situation. The Chinese control, through its subsidiary Marco Polo Italy (MPI Italy), has been called into question due to regulatory changes, and has been examined in depth with the help of auditing firms and law firms. Some directors have expressed their dissent, arguing that the shareholders' agreement between Camfin and Cnrc/MPI Italy remains in force, and therefore Cnrc/MPI Italy would have maintained control over the company.
However, despite the end of the control, Sinochem is not obliged to reduce its stake in Pirelli. This change, however, entails a lesser direct influence of the Chinese group on the Italian company, reducing the financial ties between the two entities. This evolution is also the result of the measures adopted by the Italian government in 2023, which had exercised the Golden Power to limit Sinochem's access to sensitive information collected by sensors in Pirelli tires, preventing strategic risks related to the use of the data.
Duties: Pirelli's strategy in the USA
The end of Sinochem's control is part of a broader strategy by Pirelli, aimed at strengthening its presence in the US, where regulations are coming that could ban the import or sale of connected vehicles that use components from China, in the context of growing tension between Washington and Beijing. In this context, the decision to reduce Sinochem's influence, as explained by management, represents only a first step to align corporate governance with the new regulations US, particularly those related to connected vehicles. The group confirmed that it will continue to engage with its main shareholders to ensure “full compliance with American regulations, particularly those related to connected vehicles, in the interest of the company and all its stakeholders”.
Even though the uncertainty related to the US duties continues to weigh on global strategies, Pirelli has confirmed i target financial communicated last February. The company has adopted a mitigation plan to address the impact of any tariffs, should they come into force. The objective remains to maintain the adjusted EBIT and cash generation targets, continuing with the deleverage process.
