Chinese firm in bid for Pirelli
China's biggest state-owned chemical company has announced plans to acquire Italian tyre manufacturer Pirelli.
ChemChina said it is buying a 26.2% stake in Pirelli Tyre SpA from its biggest shareholder, Camfin SpA, which is controlled by the family of Pirelli chairman Marco Tronchetti Provera.
The company said it would offer to buy the remaining outstanding shares.
If completed, the deal would value Pirelli at 8.8 billion dollars (£5.88 billion), according to financial information provider Dealogic.
Flush with cash from their country's recent boom, Chinese companies are stepping up acquisitions abroad as they diversify beyond their own economy, where growth is slowing.
Europe is seen as an attractive market for acquisitions due to the relative weakness of the euro at present and what Chinese companies see as less political resistance to large deals there than they might face in the United States.
ChemChina, also known as China National Chemical Corp, is one of China's biggest industrial companies, with businesses in petrochemicals, oil processing, agricultural chemicals, rubber products and chemical equipment.
The Beijing-based company, which has its own tyre manufacturing operation, said it would support the growth and expansion of Pirelli, the world's fifth-largest tyre supplier.
The deal reflects ChemChina's unusual status as a state-owned Chinese company that has made ambitious acquisitions abroad outside the finance and natural resources industries.
The acquisition of Pirelli, if completed, would be one of China's biggest to date in Europe.
So far this year, Chinese companies have announced 27 acquisitions in Europe totalling 12 billion dollars (£8 billion), more than half of last year's total of 23.7 billion dollars (£15.8 billion), according to Dealogic.