Italian tire maker Pirelli will soon be owned by China's National Chemical Corporation (ChemChina) after the state-owned chemical company recently agreed to buy the Italian company in a $7.7 billion deal (about PhP 344.2 billion).

According to Reuters, the Chinese takeover of Pirelli will provide ChemChina the technology needed to manufacture premium tires while at the same time, give the Italian tire maker a larger presence in the Chinese market as well as in Asia.

The news agency added that China National Tire & Rubber (a ChemChina subsidiary) will first buy the 26.2% of Pirelli before gradually launching the necessary takeover as agreed upon. In addition, bidding will start at EUR 15 (about PhP 732) per share.

Reuters also reports that Russian oil company Rosneft, who bought an indirect stake in Pirelli last March 2014, may need to reduce their debt by lowering their share in the company due to Pirelli's new deal not to mention the international sanctions that the oil company is facing as well.

Pirelli's Marco Tronchetta Provera will keep his post as CEO but the Chinese company will pick a new company chairman for the Italian tire maker.

Source: Reuters