Italy’s Pirelli (BIT:PC), the fifth-largest tire maker in the world, will no longer be controlled by Italians after 143 years. ChemChina is buying into the company in a deal worth $7.7 billion. The deal will result in ChemChina having a controlling share of the tire maker.
Italy has been a prime target for Chinese buyers, with many companies being taken over in cash deals. The weakening euro is making Italy, and other European countries, a prime spot for business takeovers.
The deal to take control of Pirelli was agreed upon by the company’s top shareholders on Sunday.
Pirelli has seen its share prices rise 3.5 percent on the news. ChemChina’s offer is slightly less than the company’s current stock price of 15.76 euros a share at 15 euros a share even. Many analysts predict that ChemChina will need to raise its bid as a result. ChemChina also has plans to make the Pirelli brand a private entity.
News of the potential takeover has spurred further rumors in Italy. Many suggest that a bidding war for the company may take place among ChemChina, Michelin and Continental.
The bid to take a controlling interest in the company will come in two parts. First, ChemChina will buy the 26.2 percent stake of the company that Camfin owns. Afterwards, a takeover bid will be submitted.