Pirelli, one of Italy’s most successful companies and a symbol of the country’s industry, will reportedly be bought by China National Chemical Corp (ChemChina).



The world’s fifth-largest tire maker will be sold for €7.1 billion ($7.7 billion), following an agreement reached on Sunday with Pirelli shareholders. Thanks to this transaction, state-owned ChemChina will get access to technology to make premium tires, while the Italian company will get a boost in the huge Chinese market.

China National Tire & Rubber, which is ChemChina’s tire making unit, will first buy the 26.2 percent that Italian holding firm Camfin owns in Pirelli, and will subsequently launch a mandatory takeover bid for the rest. Camfin investors include Pirelli boss Marco Tronchetti Provera (who will remain CEO), Italian banks UniCredit and Intesa Sanpaolo, as well as Russia’s Rosneft.

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

According to Reuters, the Pirelli deal would be China’s fifth-biggest outbound deal by an SOE, and the first major acquisition since China’s MMG Ltd led a consortium in 2014 to buy the huge Las Bambas copper mine in Peru from Glencore.

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