Italy's Pirelli says Chinese control over
The Italian government of Prime Minister Giorgia Meloni had issued a so-called golden power share that allows it to block foreign control over strategic assets, and Monday's board meeting formally took the development into account.
The board approved a report acknowledging "the issuance of the DPCM Golden Power, the control of MPI Italy (and, therefore, of Sinochem) over Pirelli has ended pursuant to" international accounting principles, the company said in a statement.
Pursuant to those accounting rules Pirelli "is not subject to the control of any entity."
MPI Italy is Sinochem's Italian holding company, and it had controlled Pirelli along with another investor since buying a 37 percent stake in 2015 in a 7.1 billion euro ($8.1 billion at the current exchange rate).
Pirelli's effective control by Sinochem put its connected tyres afoul of regulations adopted by the Biden administration that banned Chinese and Russian equipment and technology from connected vehicles due to national security concerns.
Pirelli's management noted the end of Sinochem's control "represents a first, but not decisive, step on the path to the necessary adjustment of company governance to regulatory constraints in the USA, a key market in the high value tyre segment and for the development and distribution of cyber tyre technology."
It added discussions with shareholders would continue to align Pirelli's governance with American regulations, particularly regarding connected vehicles, so it can sell its tyres with integrated sensors.
The June 2023 Italian government decree instituting golden power share did not force Sinochem to sell its stake. The government opened an investigation in November last year into a possible violation of the decree.
jra/rl
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