Italy has moved to block a Chinese state-owned company from taking control of tyre making giant Pirelli, the media reported.
The decision is part of measures announced by Italy’s government to protect Pirelli’s independence, reports the BBC.
Beijing-controlled chemical giant Sinochem is Pirelli’s biggest shareholder, with a 37 per cent stake in the 151-year-old Milan-based firm.
It comes as tensions between Beijing and the West are in focus as US Secretary of State Antony Blinken is currently in China.
Pirelli said in a statement to investors that the Italian government had ruled that only Camfin — a company controlled by Pirelli’s boss Marco Tronchetti Provera — could nominate candidates to be its chief executive, the BBC reported.
Pirelli also said the government had decided that any changes to the company’s corporate governance should be subject to official scrutiny.
It came after Sinochem told the Italian government in March that it planned to renew and update an existing shareholder pact.
Italian Prime Minister Giorgia Meloni’s administration examined the agreement under the so-called “Golden Power Procedure” rules, which are aimed at protecting businesses that are viewed as strategically important to the nation, the BBC reported.
In 2015, Pirelli was sold for 7.1bn euro ($7.8bn) to a group of investors including ChemChina and Camfin.
Six years later ChemChina merged with state-owned Sinochem.
The Chinese government’s Silk Road investment fund also owns a 9 per cent stake in Pirelli.
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