China's biggest state-owned chemical company has agreed to buy 26.2 percent of Italian tire manufacturer and announced a bid to buy the remainder of the company.

ChemChina announced Monday it was buying a stake in Pirelli held by Camfin S.p.A., the company's biggest shareholder, which is controlled by the family of Pirelli chairman Marco Tronchetti Provera.

Flush with cash from China's boom, the country's companies are stepping up acquisitions abroad as they try to diversify beyond their own economy, where growth is slowing.

Chemchina, which has its own tire production business, said it would support the growth and expansion of Pirelli, the world's fifth-largest tire manufacturer.