ChemChina To Buy Tire Maker

The state-owned chemical conglomerate ChemChina has reached a deal to purchase a controlling interest in the Italian tire company Pirelli for $7.7 billion. Pirelli is the world’s fifth-largest tire manufacturer, with annual sales of more than $6.5 billion. ChemChina’s tire subsidiary expects to play a leading role in the industry alongside rivals Bridgestone, Continental, Goodyear Tire & Rubber, and Michelin. In a two-step deal, ChemChina will first purchase the 26.2% stake in Pirelli owned by Italian holding firm Camfin. Then, joining with Camfin and other investors, ChemChina plans to buy the remainder of Pirelli’s publicly held shares. ChemChina is no stranger to large international business transactions. In 2011, it bought the Israeli agrochemicals maker Adama for $2.4 billion, and in 2006, it bought Rhodia’s silicones business, now known as Bluestar Silicones, for about $500 million.