Deal agreed with tyre-maker’s shareholders is the latest in a string of takeovers in Italy by Chinese buyers

Pirelli, the world’s fifth-largest tyre-maker, is facing a bid by China National Chemical Corp in a €7.1bn (£5.1bn) deal that will place one of the symbols of Italy’s manufacturing industry in Chinese hands.

The deal agreed with Pirelli shareholders on Sunday is the latest in a string of takeovers in Italy by cash-rich Chinese buyers, who can take advantage of a weak euro just as signs emerge that Europe is coming out of economic stagnation.

It will give state-owned ChemChina, led by acquisitive chairman Ren Jianxin, access to technology to make premium tyres, which can be sold at higher margins, and give the Italian firm a boost in the huge Chinese market.

The bid for Pirelli marks a return of China’s state-owned enterprises (SOEs) to global dealmaking following a hiatus prompted by President Xi Jinping’s anti-graft crackdown that targeted several current and former senior SOE officials.

It would be China’s fifth-biggest outbound deal by an SOE, according to Thomson Reuters data, and the first major acquisition since China’s MMG led a consortium last year to buy the huge Las Bambas copper mine in Peru from Glencore.

ChemChina’s tyre making unit China National Tire & Rubber will first buy the 26.2% that Italian holding firm Camfin owns in Pirelli, and will then launch a bid for the rest.

The bid will be launched by a vehicle controlled by the Chinese state-owned group and part-owned by Camfin investors, who include the Pirelli boss, Marco Tronchetti Provera, Italian banks UniCredit and Intesa Sanpaolo, and Russia’s Rosneft, Camfin said in a statement.

The offer will be launched at €15 per share, valuing the group at €7.1bn . The ChemChina unit also envisages taking Pirelli private.

As details of the deal were leaked on Friday, shares in Milan-listed Pirelli, which started business 143 years ago producing rubber items, rose to a 25-year high and closed at €15.23 – a sign that traders predict an improved offer or a rival bid. The shares rose further on Monday to reach €15.56 in early trading.

Sources close to the matter said on Friday the deal with the Chinese group would mean Rosneft, which is facing international sanctions due to the Ukraine crisis and needs to cut debt, reduces its stake in Pirelli.

The agreement would give Beijing-based ChemChina access to technology used in making lucrative premium tyres and could help China, already a global player in sectors such as telecoms and internet, develop its automotive industry.

In turn Pirelli, whose tyres equip cars in Formula One motor racing, would have more bandwidth to compete against larger rivals such as Michelin and Continental which are looking for growth in Asia.

The new Chinese owners will pick a new chairman while Tronchetti Provera, who started working in the tyre-maker in 1986 after marrying a member of the Italian family that founded the firm, will remain chief executive.

Previous Chinese acquisitions in Italy, the eurozone’s third-largest economy, include stakes in power grid firms Terna and Snam, turbine maker Ansaldo and luxury yachtmaker Ferretti.

Excluding the financial sector, Italy is the second-biggest acquisition market for China in Europe and fifth-largest worldwide, with 10 deals completed since the start of 2014, according to Thomson Reuters data.