Clifford Chance, Linklaters and Latham & Watkins have scored key advisory roles on a $7.7 billion bid for Pirelli, the world’s fifth-largest tire maker, by a subsidiary of China National Chemical Corp (ChemChina).

Under the deal, ChemChina's tire making division, China National Tire & Rubber Company (CNRC), will first enter into a joint venture which will buy the 26.2 percent stake Italian holding firm Camfin owns in Pirelli. The venture will then launch a mandatory takeover bid for the rest of Pirelli, the companies said in a statement.

The bid will be launched by a vehicle controlled by the Chinese state-owned group and part-owned by Camfin investors, who include Pirelli boss Marco Tronchetti Provera, Italian banks UniCredit and Intesa Sanpaolo, and Russia's Rosneft.
Rosneft bought a 50 percent stake in Camfin a year ago, before the onset of the Russian economic crisis. The oil company will remain a Pirelli investor after the buyout but it is unclear at this stage what its final stake will be.

Clifford Chance advised CNRC and ChemChina on the deal. Local law firm Studio Legale Pedersoli e Associati represented the buyers on Italian law, while JunHe provided Chinese legal advice.

Italian law firm Chiomenti and Lombardi Molinari Segni advised Pirelli’s holding company Camfin, while Linklaters advised the Rosneft investment vehicle.

Latham & Watkins represented JP Morgan, is the underwriter of the deal.

If successful, the deal will create a global leader with a market share of 10 percent, according to Swiss bank UBS. It also represents the sale of another of Italy's industrial icons, after a string of deals in recent years in sectors from fashion to food to engineering to energy, as decades of stagnation have eroded the country's economic base.

Chinese investment into Europe hit record high last year. 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.