A Chinese state firm has agreed to buy just over a quarter of Italian tyre maker Pirelli, renowned for its Formula One equipment and racy calendars, in a deal that will lead to a takeover bid.
Pirelli's largest shareholder Camfin said Sunday that it had signed a deal with state-owned chemical giant ChemChina to create a "long-term industrial partnership" for the tyre firm.
ChemChina confirmed it had agreed to pay 15 euros ($16) per share for Camfin's 26.2 percent stake in the tyremaker and plans to make a tender offer to other investors for their shares, according to a separate statement issued Monday.
The deal, which values Pirelli at around 7.1 billion euros, calls for ChemChina to hold a controlling stake of at least 50.1 percent of Pirelli in the end, Bloomberg News reported.
ChemChina and Camfin agreed to maintain "stability" in Pirelli's operations and management through the process, the ChemChina statement said.
A Camfin statement said: "The headquarters and know-how of Pirelli will remain in Italy."
It added that a very large majority of shareholders would be needed for the company to be moved overseas, with Italian media saying that would mean getting the agreement of 80 percent of shareholders.
Chairman Marco Tronchetti Provera is to stay on as chief executive of the group with the Chinese side naming a new chairman of the board. "The partnership with a global player like ChemChina... represents a big opportunity for Pirelli," he said.
ChemChina chairman Ren Jianxin said the deal would allow the partners to continue to build a world leader in the tyre industry.
ChemChina -- whose formal name is China National Chemical Corp. -- had assets of 272.5 billion yuan ($44 billion) and sales revenue of 244 billion yuan in 2013, according to the latest figures available on its website.
Pirelli began business in Milan in 1872 by making bicycle wheels before moving into the nascent car industry.
Now a mainstay of the Formula One racing circuit, Pirelli is equally well known for its calendars that have featured stars including Sophia Loren, Brigitte Bardot and Penelope Cruz.