Pirelli's U.S. Investment Plans Stalled Amid Sinochem Tensions

Italian tire maker Pirelli has delayed further U.S. investments due to governance issues with its largest shareholder, Sinochem. The Chinese state-owned group holds a 37% stake. Pirelli aims to expand in the U.S., but tensions over Chinese-linked control pose obstacles, particularly in light of U.S. regulatory concerns.

Pirelli has hit pause on plans to expand its investment in the United States due to tensions with Sinochem, its largest shareholder. The Italian tire manufacturer faces challenges over governance, impacting its expansion amidst concerns about Chinese-linked companies in the U.S. market.

Sinochem, a state-owned Chinese conglomerate, holds a 37% stake in Pirelli. Disagreements with Italian shareholders have arisen, exacerbated by the geopolitical unease of conducting business with Chinese-linked entities in the U.S., where Pirelli generates a significant portion of its revenue.

In response, the Italian government has intervened to curb Sinochem's influence, seeking to maintain management autonomy. Pirelli's potential billion-dollar investment in Georgia could mitigate tariff effects if resolved but faces regulatory hurdles due to tensions surrounding Chinese technology in the auto industry.

(With inputs from agencies.)