Pirelli's US Investment on Hold Due to Sinochem Stake Issues
MILAN (Reuters) - Pirelli has put on hold plans to invest further in the United States as it tries to smooth out tensions linked to having Chinese state-owned group Sinochem as its largest investor, the Italian tyre maker said on Friday.
Sinochem has a 37% stake in Pirelli and is at odds with the company and its Italian shareholders over governance, at a time when being seen as a Chinese-linked business is increasingly proving an obstacle for doing business in the U.S., one of Pirelli's key markets.
Pirelli makes around 25% of its revenues in North America, which it mostly serves through its plants in Mexico, South America and Europe, although it also runs a smaller facility in the U.S. state of Georgia.
The Italian government intervened in 2023 to curb Sinochem's powers in Pirelli and shield management's autonomy.
Responding on Friday to a media report, Pirelli said its desire to increase its production capacity in the U.S. "has been known for some time".
"At the moment, however, nothing has been decided given the regulatory obstacles linked to questions of governance and shareholder structure regarding which ... evaluations and in-depth analyses with Sinochem are still ongoing," it said in a statement.
The Corriere della Sera daily said on Friday that Paolo Zampolli, U.S. President Donald Trump's special envoy for global partnerships, hoped that Italian Prime Minister Giorgia Meloni would announce an investment by Pirelli during her visit to the White House on April 17.
Zampolli said Pirelli would invest $1 billion in Georgia to produce so-called smart tyres, potentially raising the investment to $2 billion in the future.
Expanding capacity in the U.S. would help limit the impact of U.S. tariffs, but Washington has also decided to crack down on Chinese technology in the automotive industry, banning key software and hardware from Chinese-controlled companies.
Marco Trochetti Provera, the Italian businessman at the helm of Pirelli since 1992 and now its executive vice-chairman, said early this week that U.S. local authorities were raising objections in negotiations on plans to expand the group's capacity in the country due to Sinochem's stake.
Tronchetti's vehicle Camfin controls a 26.4% stake in Pirelli.
Shareholders are now discussing possible solutions ahead of a board meeting on April 28.
(Reporting by Alessia Pé and Giulio Piovaccari. Editing by Giulia Segreti and Mark Potter)
