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The agreement would give Beijing-based ChemChina access to technology used in making lucrative premium tires and could help China, already a global player in sectors such as telecoms and internet, develop its automotive industry.

In turn Pirelli, whose tires equip cars in Formula One motor racing, would have more bandwidth to compete against larger rivals such as Michelin and Continental which are looking for growth in Asia.

Camfin said on Sunday Pirelli's less profitable truck and industrial tyre business would be folded into ChemChina's listed unit AEOLUS, allowing it to double its output.

The new Chinese owners will pick a new chairman while Tronchetti Provera, who started working in the tyre maker in 1986 after marrying a member of the Italian family that founded the firm, will remain chief executive.

"We're pleased to have this opportunity working with Tronchetti and his team and continue to build together a world-class entity and a market leader in (the) global tyre business," Ren said in a statement.

Previous Chinese acquisitions in Italy, the euro zone's third-largest economy, include stakes in power grid firms Terna and Snam, turbine maker Ansaldo and luxury yacht maker Ferretti.

Excluding the financial sector, Italy is the second-biggest acquisition market for China in Europe and fifth-largest worldwide, with 10 deals completed since the start of 2014, according to Thomson Reuters data.

Rothschild and ChemChina Finance Corp advised ChemChina. J.P. Morgan advised China National Tire & Rubber, while Lazard was the financial adviser to Camfin.