Italy has blocked Chinese takeover of Pirelli.
Italy has attempted to prevent a Chinese state-owned business from acquiring Pirelli, the world’s largest tire manufacturer.
The decision is part of the Italian government’s announcement of measures to defend Pirelli’s independence.
Sinochem, a Beijing-controlled chemical conglomerate, owns 37% of Pirelli, a 151-year-old Milan-based corporation.
It comes as tensions between Beijing and the West are highlighted by US Secretary of State John Kerry’s visit to China.
In a letter to investors on Sunday, Pirelli claimed that the Italian government had determined that only Camfin, a firm controlled by Pirelli’s CEO Marco Tronchetti Provera, may submit candidates for chief executive.
Pirelli also stated that the government had agreed that any changes to the company’s corporate governance would be scrutinized.
It followed Sinochem’s March announcement to the Italian authorities that it intended to renew and update an existing shareholder agreement.
The arrangement was investigated by the office of Italian Prime Minister Giorgia Meloni under the so-called “Golden Power Procedure” guidelines, which are designed to protect enterprises deemed strategically important to the country.
Pirelli was sold in 2015 for 7.1 billion euros (£6.1 billion; $7.8 billion) to a group of investors led by ChemChina and Camfin. ChemChina merged with state-owned Sinochem six years later. Pirelli is also owned by the Chinese government’s Silk Road investment fund, which owns 9% of the company.
US Secretary of State Antony Blinken is in Beijing on the final day of an unusual visit to China by a senior US official.
Mr. Blinken’s visit comes at a time when relations between China and several Western countries have worsened over problems such as trade, Taiwan, and security.
Before his visit, officials saw little prospect of resolving the various disagreements between the world’s two largest economies, including Washington’s efforts to stifle China’s computer chip industry.