China National Chemical Corporation (ChemChina) agreed on Sunday to buy tire maker Pirelli in a 7.1 billion euro ($7.7 billion) deal that will place one of the symbols of Italy’s manufacturing industry in Chinese hands.

The deal with Pirelli’s shareholders is the latest in a string of takeovers 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.

It will give ChemChina access to technology to make premium tires, which can be sold at higher margins, and give the Italian company a larger presence in the huge Chinese market.

ChemChina’s tire making unit China National Tire & Rubber will first buy the 26.2 percent Italian holding firm Camfin owns in Pirelli and will then launch a mandatory takeover bid for the rest.

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

The offer will be launched at 15 euros per share, valuing the 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 the world’s fifth-largest tire maker private.

Pirelli says its parent company’s change of ownership will not affect its Formula 1 programme

via Reuters