Pirelli, the world's fifth largest tire manufacturer, is to be sold to state-owned chemical conglomerate ChemChina, with a deal expected to be concluded this summer. According to Autmotive News Europe, ChemChina will initiate the takeover by acquiring a 26.2-percent share in the Italian tire maker. A public tender offer for the remaining shares will follow. The deal is worth 7.1 billion euros in total, or around $7.7 billion, and will give the Chinese firm access to premium tire technology.

Pirelli currently supply tires for Formula One race cars, and the new deal will give them a boost in the Chinese market, enabling it to better compete against bigger rivals Michelin and Continental who are both seeking growth in Asia. Chairman, and part-owner, Marco Tronchetti Provera, will remain CEO under the deal, while ChemChina will appoint a new chairman. Pirelli's headquarters will remain in Italy for the foreseeable future. Taking advantage of a weak euro, the deal is the latest in a long list of Italian takeovers by cash-rich Chinese investors, with Italy remaining the second-biggest acquisition market in Europe for China and the fifth-largest worldwide.