Italian tire giant Pirelli is poised to redefine its corporate governance structure by limiting the influence of its largest shareholder, China’s Sinochem, according to Italian newspaper Il Messaggero.

Pirelli’s board is expected to approve the shareholder agreement on Monday, formally establishing that although Sinochem retains its 37% stake, it will no longer be regarded as having control over the company’s governance for regulatory purposes.

The move comes after months of tension between Chinese and Italian shareholders. Sinochem’s controlling presence had been seen as a barrier to Pirelli’s expansion efforts in the United States, where regulatory scrutiny over Chinese influence has intensified.

Under the new agreement:

• Management decisions will remain fully autonomous.

• Sinochem will not be considered to have “dominant influence” over Pirelli’s board or strategy.

Both Pirelli and Sinochem declined to immediately comment.

Earlier this month, Pirelli announced it was suspending new investments in the U.S. while working to resolve governance tensions related to Sinochem’s role. The board meeting — initially scheduled for March — was delayed to April to allow more time for negotiations.

The board will also approve Pirelli’s 2024 financial report during Monday’s session.

Pirelli’s stock (PIRC.MI) rose 3.38% on the Milan exchange following reports of the expected governance change.