(Alliance News) -Pirelli & C Spa on Monday said that Chinese control over the company had ended following the government exerting national security measures.

The Italian government of Prime Minister Giorgia Meloni had issued a so-called golden power share that allows it to block foreign control over strategic assets, and Monday's board meeting formally took the development into account.

The board approved a report acknowledging "the issuance of the DPCM Golden Power, the control of MPI Italy (and, therefore, of Sinochem) over Pirelli has ended pursuant to" international accounting principles, the company said in a statement.

Pursuant to those accounting rules Pirelli "is not subject to the control of any entity," the firm added.

The vote was split with five of the company’s Chinese directors opposing it and one abstaining, Pirelli said in a statement Monday. The board is comprised of 15 members.

Pirelli said it is a "first, but not decisive", step on the path to the necessary adjustment of company governance to regulatory constraints in the US, a "key" market in the high value tyre segment and for the development and distribution of cyber tyre technology.

Pirelli said it will continue its dialogue with the main shareholders to "align Pirelli’s governance with American regulations, particularly regarding connected vehicles, in the interests of the company and all its stakeholders."

Sinochem, which owns a Pirelli stake of 37% through its Italian branch Marco Polo International, expressed "deep disappointment and strong opposition" to the decision.

In addition, Pirelli declared a dividend of EUR0.25 per share for 2024 and reaffirmed 2025 financial targets, in view of the "high level of uncertainty surrounding US tariffs."

Pirelli said it has already defined a mitigation plan for the impact of US tariffs, should the measures currently announced come into effect, with the aim of guaranteeing adjusted earnings before interest and taxes target and cash generation at the lower end of guidance, therefore achieving the deleveraging target.

Shares in Pirelli closed down 0.5% at EUR5.36 in Milan on Monday.

By Jeremy Cutler, Alliance News reporter

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