Pirelli puts US investment on hold over stakeholder issues

Milan, Italy – Pirelli & C. SpA has announced that it is not making any investment in US production capacity, due mainly to unresolved issues surrounding its shareholder structure.

The 11 April announcement was in response to media reports suggesting that Pirelli intended to invest $1 billion to improve output at its manufacturing plant in Rome, Georgia.

“The company states that the desire to increase its production capacity in that market, in line with a local-for-local strategy, has been known for some time,” said the Italian tire maker in a brief statement.

At the moment, however, “nothing has been decided, given the regulatory obstacles linked to questions of governance and shareholder structure,” it added.

Pirelli stressed that “evaluations and in-depth analyses with Sinochem are still ongoing” in order to restructure the tire maker’s shareholder structure.

Last month, the Italian manufacturer postponed key board resolutions and rescheduled its annual shareholder meeting, citing efforts to address US market regulations. (ERJ report)

According to CEO Andrea Casaluci, Pirelli’s management is working to find "a solution that will allow the company to adapt to the new regulations of the American market."

Among the issues facing Pirelli in the region are those related to its largest shareholder Chinese group Sinochem, which currently holds a 37% stake in the Milan tire group.

In particular, the Washington administration is increasingly intensifying its scrutiny of and restrictions on China-linked software and hardware being used on US roads.