ChemChina to purchase Pirelli in €7.1bn deal

State-owned China National Chemical Corporation(ChemChina) has agreed to purchase Pirelli that would value the Italian tyre manufacturer at €7.1 billion.

ChemChina will initially pay out $1.8 billion to buy a 26.2% stake in Pirelli held by investment firm Camfin. The Chinese company will later launch a bid to take the remaining stake at a price of €15 a share.

The deal is latest in line of high profile takeover by Chinese companies and will give ChemChina access to Pirelli’s technology. The Italian brand - which is the fifth largest tyre supplier in the world - in turn, will get easy access to world’s most populous country.

Pirelli’s shares responded positively to the news and were trading 2.4% higher at €15.59 at the time of writing.

The Milan based company has actively participated in motorsport since its inception and is currently the official tyre supplier in Formula 1.