By Daniel Hunter

Italian tyre manufacturer Pirelli is to be bought by Chinese state-owned China National Chemical (ChemChina).

It is the latest takeover of an Italian company made by a Chinese business.

The tyre unit of ChemChina, China National Tire & Rubber, will purchase a 26.2% stake which is owned by Italian investment firm Camfin. The remaining shares will then be purchased.

ChemChina has offered to pay €15 per share, valuing Pirelli at €7.1bn (£5.1bn).

The news of the takeover deal sent Pirelli shares soaring to €15.23 - a 23-year high.

Pirelli chief executive Tronchetti Provera will remain in his position. He joined the tyre manufacturer in 1986 after marrying a member of the Pirelli's founding family.