State-owned China National Chemical Corp (ChemChina) has announced plans to acquire Italian tyre manufacturer Pirelli, as cash-rich Chinese companies press ahead with their overseas-buying spree to diversify operations.

As per the plan, a unit of ChemChina will initially pay about €1.8bn (£, $1.9bn) to buy a 26% controlling stake in Pirelli owned by Camfin, which is controlled by the family of Pirelli chairman Marco Tronchetti Provera.

Subsequently, the company would make an offer to buy the remaining shares at about €15 a share. The deal values Pirelli, one of the symbols of Italy's manufacturing industry, at around $7.7bn.

Beijing-based Chemchina is one of China's industrial majors, with notable presence in businesses such as petrochemicals, oil processing, agricultural chemicals, rubber products and chemical equipment.

"Pursuant to the agreement, the operation and management team of Pirelli will be kept stable, and new business growth strategy will be defined. The transaction is subject to approvals by the competent Chinese and foreign governmental authorities," ChemChina said in a statement.

With a history of more than 140 years, Pirelli is currently the fifth largest global tyre manufacturer, generating annual revenues of more than €6bn from 160 countries. It is currently the sole tyre supplier to Formula 1.

Pirelli would be combined with ChemChina subsidiary China National Tire & Rubber, which is the market leader in China for steel radial tyres and off-the-road tyres.

"We are delighted with the opportunity to team up with Mr Marco Tronchetti Provera and his team to continue to build together a world class organization and a market leader in the global tyre industry," said Jianxin Ren, ChemChina chairman.

"The partnership with a global player like ChemChina, through its affiliates, represents a great opportunity for Pirelli. CNRC's approach to business and strategic vision guarantee Pirelli's development and stability," said Provera.

The acquisition is expected to "strengthen Pirelli's development plans, reinforce the coverage of strategic geographical areas, and through integration, enable the company to double its volumes in the industrial tyre business".