MILAN: State-owned China National Chemical Corp (ChemChina) will give up control of Pirelli as part of the Italian tyremaker’s return to the bourse to show Beijing has a market friendly approach to investments in Europe, Pirelli’s chief executive said on Monday.

ChemChina took over Pirelli two years ago by taking a 65 per cent stake in the holding company controlling the maker of Ferrari racing tyres, which was then de-listed from the Milan bourse.

The world’s fifth-largest tyre maker is now coming back on the market with an initial public offer of up to 40 per cent of its capital, and the Chinese will have between 45-46.7 per cent after the sale.

Pirelli has long said the Chinese had a hands-off attitude to the company’s management, but their reducing the stake below 50 per cent comes at a time of growing weariness over Chinese investments in Europe.

Last week, European Commission chief Jean-Claude Juncker proposed limits to China’s ability to buy up companies in infrastructure, hi-tech manufacturing and energy.

ChemChina Chairman Ren Jianxin was recently confirmed as Pirelli’s chairman and there is a strong Chinese presence on the board, but a set of bylaws was agreed to protect Pirelli’s technological know-how and governance.

“They (ChemChina) agreed to all the conditions that we put forward on the governance front,” Pirelli CEO Marco Tronchetti Provera told reporters as the IPO officially kicked off.

“They wanted to show that their investment is a financial one and respects the autonomy and responsibility of the management, and above all respects the minorities.” Established in 1872 and one of Italy’s best-known corporate names, Pirelli is expected to start trading on the Milan stock market — where it had traded since 1922 before the de-listing — on Oct 4.

Published in Dawn, September 19th, 2017