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Amid rising tension between China and Western countries over the control of key technologies, Italy is mulling over ways to curtail the influence of China’s Sinochem on tyre maker Pirelli, reported The Straits Times.
Italian officials are currently discussing several options, as part of talks with Pirelli investors over the company’s ownership structure as Sinochem is Pirelli’s largest shareholder.
Options include limiting information sharing on sensitive and strategic technology with Sinochem-appointed board members, according to people familiar with the matter who asked not to be named on confidential issues, reported The Straits Times.
Options include limiting information sharing on sensitive and strategic technology with Sinochem-appointed board members, the people said.
Italy will soon get a chance to intervene in Pirelli by using its so-called “golden power”, which enables the government to stop or modify business deals among private companies operating in strategic sectors.
Pirelli specialises in high-technology tyres and is a supplier of super carmakers, as well as a partner of Formula 1 racing.
They may also involve limiting the voting rights of board members appointed by Sinochem. No decision has been taken and talks are ongoing, reported The Straits Times.
The company recently notified the Italian government of the intention to renew a shareholder pact between Sinochem and Camfin, the financial holding of Pirelli’s chief executive Marco Tronchetti Provera, reported The Straits Times.
The pact is seen as a brake on Pirelli, as Chinese involvement requires the company to seek the government’s approval for most business decisions according to golden power rules.
The dilemma is particularly delicate for Italian Prime Minister Giorgia Meloni.
Italy is the only Group of Seven countries that has signed a memorandum of understanding with China on its Belt and Road initiative.
The pact, which has a limited practical impact but high symbolic value, will be automatically extended in 2024 unless Meloni decides to opt out, a move that could risk retaliation from Beijing, reported The Straits Times.
The discussions reflect a dilemma in Europe about doing business with Beijing as relations between the United States and China are quickly deteriorating over issues ranging from export controls to sanctions over human rights.
Meanwhile, Chinese President Xi Jinping aims to use the visit by French President Emmanuel Macron to create some distance between Europe and the US.
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