Chinese Investors Appeal Italy’s Curbs on Pirelli Stake

Pirelli’s Chinese shareholders are challenging Italy’s limits on their stake ahead of an annual shareholder meeting on June 25.

A Pirelli tire is pictured in the paddock at the Jeddah Corniche Circuit ahead of the 2023 Saudi Arabia Formula One Grand Prix on March 16, 2023. Giuseppe Cacace/AFP via Getty Images

Chinese investors in Pirelli have appealed against Italian government restrictions on their stake in the Italian tire maker.

China National Tire & Rubber Corporation (CNRC) and its Italian investment vehicle Marco Polo International filed appeals on June 7 against an April government decree, Pirelli said.

The decree was issued under Italy’s Golden Power rules—a national security authority that gives the government the power to review foreign sectors and impose protective conditions to safeguard national interests.

The legal challenge “will not affect the regular conduct” of Pirelli’s shareholder meeting on June 25, where investors are due to vote on a new board, the company said.

Italy imposed the restrictions after reviewing the group’s ownership structure and governance arrangements. The decree stated that safeguards were needed because of Pirelli’s Cyber Tyre technology, which uses sensors embedded in tires to collect and transmit data.

Milan-based Pirelli is one of the world’s largest tyre manufacturers and supplies products to major carmakers worldwide.

CNRC, part of Chinese state-owned chemicals group Sinochem, controls about 34 percent of Pirelli through Marco Polo.

According to Pirelli’s disclosures, the April decree limits Marco Polo’s influence over governance while it remains above a specified shareholding threshold. The measures include restrictions on board appointments and requirements designed to protect sensitive information and decision-making processes.

At the centre of the dispute is Cyber Tyre, which allows tires to function as connected sensors. The technology can generate data on road conditions and vehicle performance, and could support applications such as autonomous driving and digital twin systems.

Pirelli said it reserves the right to intervene in the court proceedings to defend its interests.

The case is the latest development in a years-long effort by Rome to balance foreign investment with concerns over strategic technologies.

In 2023, the Italian government used its Golden Power authority to impose conditions on a shareholders’ agreement involving CNRC. The intervention followed concerns that Pirelli’s advanced technology and industrial know-how required additional protections.

At the time, authorities warned that “improper use of this technology can entail significant risks,” citing concerns over data confidentiality and security-sensitive information.

The move reflected a broader trend across Europe, where governments have increased scrutiny of foreign investments in companies involved in critical technologies, data infrastructure, and advanced manufacturing.

While Italy did not block CNRC from remaining Pirelli’s largest shareholder, it sought to preserve the company’s operational autonomy and protect access to sensitive information.

The April decree expanded on those earlier safeguards and reaffirmed Pirelli’s strategic importance under Italian law.

The appeals are now before the Regional Administrative Court of Lazio. The specific legal arguments put forward by CNRC and Marco Polo have not been made public.

Pirelli’s shareholder meeting is expected to proceed as scheduled while the case moves through the courts.

Reuters contributed to this report.