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Pirelli’s board is urging its largest investor, China’s Sinochem, to reduce its stake due to concerns that the Trump administration’s stringent stance on Chinese ownership of American assets might hinder the Italian tire manufacturer’s expansion plans in the United States.
During a board meeting on Wednesday, Pirelli’s management is expected to ask the Chinese investor to immediately reduce its 37 percent stake to below the 26.4 percent held by the Italian shareholder Camfin. This information comes from several individuals familiar with the situation. This development highlights the significant measures companies are taking to adapt to policies under President Donald Trump’s administration.
On a related note, the Korean car manufacturer Hyundai recently announced a $21 billion investment in the U.S., a move that Trump cited as evidence of the effectiveness of his trade policies aimed at boosting domestic manufacturing.
One proposal from Pirelli suggests that Sinochem could lower its stake to below 25 percent through a share buyback, immediately reselling some stock on the market. However, it remains unclear whether Sinochem, represented by its president Jiao Jian—also the chair of Pirelli—will agree to this plan, as previous discussions did not lead to a consensus.
Pirelli declined to comment on the matter, and Sinochem was not immediately available for a statement. Pirelli, which operates a factory in Georgia, produces most of its tires for the North American market in Mexico and South America. In light of Trump’s trade policies and the potential imposition of tariffs on imported cars, Pirelli has been seeking to expand its U.S. operations, which account for a quarter of its global revenue.
The tire manufacturer has reportedly faced resistance in its U.S. expansion discussions, possibly due to its largest shareholder being a Chinese state-owned entity. Pirelli, a supplier of tires for Formula 1 cars, also possesses proprietary technology that links tire sensor data with vehicle commands, a technology in high demand in the U.S. Despite this demand, there are concerns that Sinochem’s stake could exclude them from a potentially lucrative market.
The U.S. recently finalized a ban on Chinese automated driving systems and related technologies such as Bluetooth, WiFi, and satellite communications. ChemChina, which later merged with Sinochem, initially acquired a majority stake in Pirelli through a $7.7 billion deal in 2015. Under that agreement, the Chinese investor pledged not to interfere with Pirelli’s daily management, strategy, or appointments.
The current tensions between Pirelli and Sinochem arise less than two years after Italian Prime Minister Giorgia Meloni’s government imposed restrictions on Sinochem’s shareholder rights under Italy’s “golden power” foreign investment screening mechanism. This intervention was prompted by repeated conflicts between Pirelli’s Italian management and Sinochem, as Beijing aimed to strengthen its influence over the historic Italian industrial group.
These disputes intensified when Sinochem attempted in 2023 to amend a shareholder pact, removing Camfin’s indefinite right to appoint Pirelli’s chief executive, an issue exacerbated by the broader context of geopolitical tensions.
