Italy Stops Chinese control of Pirelli
(Oilandgaspress) Italy has moved to block Sinochem, a Chinese state-owned company from taking control of tyre conglomerate, Pirelli.
Pirelli & C. S.p.A. (“Pirelli”) announced that, in relation to the “Golden Power Procedure” that, as communicated by the Company on 5 April 2023, was launched in relation to the renewal of the shareholder agreement signed on 16 May 2022 by China National Tire & Rubber Corporation Ltd. (“CNRC”), Marco Polo International Italy S.r.l., Camfin S.p.A. (“Camfin”) and Marco Tronchetti Provera & C. S.p.A. (the “Shareholder Agreement”), on 16 June 2023 it received notification of the measures with which the Cabinet exercised its special powers in accordance with legislative decree 21/2012 (the “Measures”). The Cabinet took into consideration that the Measures indicated below have the aim of preparing a network of measures operating to protect the autonomy of Pirelli and its management, as well as the protection of technologies and information of strategic importance possessed by the Company.
The Cabinet, in adopting the Measures, took into consideration, among other things, that the technology of importance for the purposes of legislative decree 21/2012 represents part of the economic activity of Pirelli and the risks connected with it require supervision of a structural nature regardless of the temporariness of the shareholder agreement, as well as any change to the corporate governance of Pirelli, including the failed renewal or stipulation of the Shareholder Agreement, should be the object of notification in accordance with legislative decree 21/2012.
In particular, the Measures call for the imposition of the following specific limitations with regard to CNRC:
(i) Respect the commitment to not exercise activities of direction or coordination as detailed below, intended only as examples and not exhaustive:
- Ensure the full autonomy of Pirelli with regard to the management of relationships with clients and suppliers;
- Guarantee that Pirelli autonomously prepares strategic, industrial, financial plans and/or the budget for the Company and the Group;
- Guarantee that Pirelli is not subject to instructions on the part of the Sinochem Group;
- Not adopt acts, decisions or communication that could make it seem that the decisions of Pirelli are the consequence of the impositions and imperatives of CNRC;
- Not centralize treasury services or other functions of financial assistance or coordination (eg. cash pooling) nor other technical functions of coordination (eg. integration of Pirelli’s information systems with those of Sinochem Holdings Corporation Ltd., including those of the Chinese subsidiaries of Pirelli);
- Not issue directives or instructions, and in any case not coordinate initiatives, concerning decisions in financial and credit matters and in matters of Pirelli’s research and development;
- Not issue directives with regard to the fulfillment of extraordinary operations by Pirelli, such as, for example, listings of financial instruments, acquisitions, disposals, concentrations, conferrals, mergers, spin-offs, etc.;
- Not adopt determining decisions with regard to the operational strategies of Pirelli nor formulate strategic directives for the group;
- Guarantee the absence of organizational-functional links between Pirelli on the one hand and CNRC on the other;
(ii) Commit in order that the Chief Executive of Pirelli, taken from the majority list, is indicated by Camfin and that, as a consequence, of the 12 Directors of Pirelli, taken from the majority list, 4 shall be designated by Camfin;
(iii) Commit to the introduction, similar to the Shareholder Agreement signed on 1 August 2019, of the role of General Manager, to whom shall be delegated the power to implement the business plan, budget and ordinary management of Pirelli;
(iv) Commit so that all the delegated Organs of Pirelli shall be identified exclusively from among the designated Administrators of Camfin;
(v) Commit so that the power of nomination and revocation of Directors and deputy directors of Pirelli shall be deferred, in accordance with article 11.9, of the Pirelli bylaws, to the Executive Vice Chairman or the Chief Executive;
(vi) Commit, together with Pirelli, so that the Bylaws shall be modified in such a manner that, in relation to the advisory resolutions related to assets of strategic importance as well as the nomination and revocation of the offices of managers with strategic responsibility (key managers of Pirelli), the proposal shall be reserved for the Chief Executive and any contrary decision to the same can only be adopted with the vote at least 4/5 of the Board of Directors.
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