Governance

Pirelli, Camfin does not renew the pact with Sinochem

The decision 'after realising that it is impossible at this stage to find solutions to adapt governance in time to meet US regulatory requirements'

FILE PHOTO: Tires are seen during the 150th anniversary celebration of Italian tyremaker Pirelli in Milan, Italy, January 28, 2022. REUTERS/Flavio Lo Scalzo/File Photo

2' min read

Translated by AI
Versione italiana

2' min read

Translated by AI
Versione italiana

Camfin announced today its decision not to renew the shareholders' agreement on Pirelli, signed with the Sinochem group, which will expire on 18 May next. The decision was taken, reads a note, 'after having taken note of the impossibility of identifying at this stage with Sinochem, in the context of the dialogue between Pirelli shareholders promoted by the Italian government, solutions to adapt Pirelli's governance in time to meet US regulatory requirements, allowing the company to continue to develop Cyber Tyre technology'.

Camfin's decision, not to proceed with the renewal of the pact with the Chinese group Sinochem, will be notified to the presidency of the Council of Ministers, in accordance with the Golden Power regulations. This decision also ensures that there will be 'sufficient time to complete the legal formalities' for the Pirelli shareholders' meeting, scheduled for 25 June next, which is called to renew the board of directors.

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The shareholders' pact had come into force three years ago, on 19 May 2023, but had been signed on 16 May 2022 by China National Chemical Corporation, China National Tire & Rubber Corporation, CNRC International Limited, Fourteen Sundew, Marco Polo International Italy, Camfin and Marco Tronchetti Provera & C. Despite the dialogue between Pirelli's shareholders promoted by the Italian government, no solution has yet been reached and there is no more time.

Camfin is not closing the door completely and 'remains open to discussing proposed solutions in the interest of the company, the market and all stakeholders, to enable Pirelli to be in line with US regulations in the near future'.

The Decree of the President of the Council of Ministers of 16 June 2023 had established that 'any change in corporate governance' must be notified and 'in compliance with this provision, Camfin, after informing Pirelli, will notify the Presidency of the Council of Ministers, pursuant to the Golden Power Decree, of its decision not to proceed with the renewal of the Pact with Sinochem Group'.

The affair

Pirelli risks seeing its access to the US market, which is worth about a fifth of its revenues, jeopardised by the cumbersome presence of Sinochem. Its cyber tyres, which collect data and information thanks to sensors positioned inside the tyres and are able to communicate with connected vehicles, have in fact ended up in the crosshairs of the US Department of Commerce which, in order to protect the sensitive data and privacy of Americans, has banned software and hardware from manufacturers linked to China. The governance knot will therefore have to be resolved by mid-March, when the deadline for the US to declare that it does not possess Chinese software expires.

The negotiations

In recent weeks, the negotiations between Camfin and Sinochem to define the reorganisation of Pirelli had come to a head, with various solutions being studied. Among these, the Bloomberg agency reported a fortnight ago, was the possibility of Sinochem reducing its stake in the Bicocca group from the current 34% to around 10%. In this way, Sinochem - currently Bicocca's largest shareholder - would become a passive investor, significantly limiting its influence.

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