CNRC submits proposal to address Pirelli US regulatory concerns

China National Tire and Rubber Co Ltd, or CNRC, the controlling shareholder of Italian tire maker Pirelli, has submitted a proposal to address governance arrangements and potential regulatory concerns in the United States.

The move followed an announcement last week by Camfin, Pirelli's second-largest shareholder, that it would not renew its shareholder agreement with China's Sinochem Holdings Corp, the parent group of CNRC.

Milan-based Camfin said Pirelli's expansion in the US faces additional hurdles due to its main shareholder being a Chinese entity, as the US government steps up restrictions on Chinese automotive technology.

In response to this move, CNRC said it has submitted a structured, well-founded proposal based on standard and widely used corporate tools in line with best international practice, with the objective of addressing both Pirelli's governance framework and any concerns related to US regulatory requirements.

According to a CNRC statement released early this week, the Chinese company hopes its proposal can be neutrally assessed with a genuine cooperative spirit, and it will support any institutional, transparent and fact-based assessment process.

CNRC reiterated its full willingness to engage in good-faith discussions with relevant parties to identify market-consistent and sustainable solutions that are in the best interest of Pirelli, its shareholders, employees and long-term industrial development in every international market.

CNRC is currently Pirelli's largest shareholder, holding about 34 percent of the Italian tire maker, while Camfin owns 25.3 percent and has said it plans to raise its stake to 29.9 percent.

Ji Wenhua, a professor at the School of Law of the University of International Business and Economics in Beijing, said CNRC's response reflects a rational and market-oriented approach, emphasizing governance transparency and regulatory compliance rather than confrontation, which helps stabilize expectations and demonstrates how Chinese companies are increasingly adapting to complex overseas regulatory environments.

Similar views were shared by Ding Rijia, a professor of economics at the China University of Mining and Technology-Beijing.

"Such challenges are an inevitable part of the learning curve for Chinese firms expanding globally, requiring more sophisticated strategies in risk management, localization and stakeholder engagement in an increasingly complex geopolitical and regulatory environment," he said.

Before its merger into Sinochem Holdings in 2021, China National Chemical Corp (ChemChina), which owned CNRC, together with the Silk Road Fund, acquired Pirelli in 2015 through a tender offer. Following the acquisition, Pirelli restructured its operations, spinning off its industrial tire business and refocusing on high-end consumer tires, subsequently relisting on Borsa Italiana in Milan, Italy's stock exchange.

At the time, the partnership was publicly characterized by both sides as mutually beneficial, with Chem-China supporting Pirelli's expansion into China and other key markets.

With 18 production plants around the world, Milan-headquartered Pirelli has built a market presence in over 160 countries and regions and has more than 30,000 employees.