Italian tyre manufacturer and sole Formula One tyre supplier Pirelli looks set to be sold to Chinese state owned company, ChemChina Group.
Reuters news agency reports that Pirelli’s shareholders have agreed a €7.1 billion deal that will initially see ChemChina acquire a 26% stake in the company before launching a full takeover bid later on.
As part of the new agreement, Pirelli will receive a ChemChina appointed CEO. The new agreement will also see the Italian manufacturer increase their market share in the Chinese market and it will also help the company financially.
Pirelli will provide the Chinese National Tire and Rubber Company with know-how and technology. It is uncertain whether or not the new deal will have any impact on Pirelli Motorsports Formula One operation. The company are hoping to reach an agreement with Formula One over a new tyre contract when the tyre supply agreement for Formula One comes up for tender.
© Ben Johnston 2015