MILAN: China National Chemical Corp. (ChemChina) is to buy Pirelli, the world’s fifth-largest tire maker, in a 7.1 billion-euro ($7.7 billion) deal that will put the 143-year-old Italian company in Chinese hands.

The deal agreed with Pirelli’s top shareholders on Sunday is the latest in a series of takeovers made in Italy by cash-rich Chinese buyers, who can take advantage of a weak euro just as signs emerge that Europe is coming out of economic stagnation.

The offer will be launched at 15 euros per share, valuing the Italian group at 7.1 billion euros excluding net debt of almost 1 billion euros at the end of 2014. The ChemChina unit also envisages taking Pirelli private.

Shares in Pirelli rose as much as 3.5 percent to 15.76 euros — above the offer price, with some traders pointing to expectations that ChemChina may have to lift its bid to win over shareholders.

“The success of the likely public offer at 15 euros cannot be taken for granted,” Banca Akros said in a note.

But if successful the deal will give state-owned ChemChina, led by acquisitive chairman Ren Jianxin, access to technology to make premium tires, which can be sold at higher margins, and give the Italian firm a boost in the huge Chinese market.

The bid for Pirelli marks a return of China’s state-owned enterprises to global dealmaking following a hiatus caused by President Xi Jinping’s anti-graft crackdown that targeted several current and former senior officials at state companies.

It would be China’s fifth-biggest outbound deal by a state-owned firm, according to Thomson Reuters data, and the first major acquisition since China’s MMG Ltd. led a consortium last year to buy the huge Las Bambas copper mine in Peru from Glencore.

Under the proposed deal ChemChina’s tire making unit, China National Tire & Rubber, will enter into a joint venture which will first buy the 26.2 percent stake that Italian holding firm Camfin owns in Pirelli. The venture will then launch a mandatory takeover bid for the rest of Pirelli, the companies said in a statement on Sunday.

The bid will be launched by a vehicle controlled by the Chinese state-owned group and part-owned by Camfin investors, who include Pirelli boss Marco Tronchetti Provera, Italian banks UniCredit and Intesa Sanpaolo, and Russia’s Rosneft.