Pirelli refused to split the business
The Board of Directors of Pirelli has voted against the proposal by Sinochem to spin off the "smart" tire business into a separate entity, which was intended by the company's largest shareholder to address issues related to restrictions on the use of Chinese technology in the automotive sector in the US market. According to a statement by Pirelli, the management is against any projects or initiatives that could lead to any form of separation of the company. Nine members of the Board of Directors voted against, five in favor, and all the latter were appointed by the Chinese investor.
Pirelli notes that the proposed Chinese solution "would irreversibly damage the integrated business model, under which technologies and innovations, product development, production, and marketing exist within a framework of continuous data exchange", and the new structure would receive patents, which would hinder their free use by the tire manufacturer, "depriving it of strategic know-how, which is absolutely contrary to the principles laid down in the company's charter".
"Pirelli was the first to develop and launch the Cyber Tyre hardware and software system, which interacts with vehicle systems in real-time, — the company points out. — The strategic importance and effectiveness of the technology are proven by the fact that it is already being used by a number of leading premium car manufacturers, and negotiations are underway for new supplies. "Cyber tires" can also interact with infrastructure, enhancing the functionality of "smart" roads and highway networks, and relevant agreements have already been signed with the authorities of Apulia [a region in southeastern Italy], Movyon (part of Autostrade per l'Italia), and Anas".
The company also emphasizes that the current automotive industry is highly competitive, and the situation is characterized by increasing integration and interaction of digital systems and vehicles, including in the segment of autonomous vehicles, "in connection with which tires have undergone a radical transformation and have become a complex and technologically advanced system that collects, processes, and transmits data".
Regarding the proposal by Sinochem, Pirelli notes that it "will slow down our technological development, putting our competitive and commercial advantage at risk, as well as our leadership in innovation".
And as a final argument, Pirelli states that the proposed option would not allow overcoming the restrictions imposed by the US in any case.
Sinochem, controlled by the Chinese authorities, owns 34.1% of Pirelli's shares.