Italy Blocks Chinese Firm From Taking Over Tire Giant Pirelli

Italian officials are looking to block a Chinese company from taking control of tire maker Pirelli.

Sinochem, owned by the Chinese government, already has a 37% stake in the Italian company but will not be able to take full control of it or name a CEO under the Italian measures.

The moves came as Italian Prime Minister Giorgia Meloni's administration examined an agreement due to be reauthorized between the company and Sinochem's subsidiary, China National Tire & Rubber Corporation.

The Italian government has the power to block takeovers of businesses that are viewed as strategically important to the nation.

The decision was made to protect Pirelli's independence, the tire company said in a statement, of he moves, which block Sinochem from picking a chief executive of Pirelli despite being its largest shareholder.

The Italian government had ruled that only a shareholder company controlled by Pirelli boss Marco Tronchetti Provera could nominate candidates to be its CEO.

Pirelli also said the government had decided that any changes to the company's corporate governance should be subject to official scrutiny, according to the BBC.

Reuters reported the administration also decided Sinochem should pick no more than eight members of Pirelli's 15-strong board.

Sinochem has so far declined to comment on the measures, with lawyers telling the Financial Times that Beijing is still reviewing the decision and its implications.

Provera has previously warned the Italian government that the company is under threat from Beijing’s tightening grip, the Financial Times reported.