Milan: Italy has become China’s favourite destination for takeovers.

With ChemChina’s planned purchase of the iconic tire maker Pirelli SpA, acquisitions by the country in Italy total almost $14 billion in the last 12 months, according to data compiled by Bloomberg. That ranks Italy ahead of the US and the UK.

“Italy is the place to go for Chinese companies as they can find industrial innovation, know-how, established brands and the managerial creativity they are looking for," said Giuliano Noci, vice rector for China at Milan’s Polytechnic University.

Italy is an easy target because domestic investors lack sufficient capital to transform their companies into global players and the government doesn’t have the power—or cash—to defend national champions, Noci said.

Prime Minister Matteo Renzi, who’s struggling to cut Europe’s second-biggest sovereign debt of more than €2 trillion ($2.2 trillion), is seeking to boost foreign investment as the country struggles to emerge from its longest recession on record. In October, Renzi signed deals worth 8 billion euros with Chinese Premier Li Keqiang.

“It’s obvious that Italy is finally on the radar screen of Chinese investors and we see a good number of mid-sized deals happening," said Marco Marazzi, a partner for the law firm Baker and McKenzie in Milan who moved to Italy in 2013 from Shanghai to focus on Chinese investments. “At the same time, we hope that the same opportunities will be offered to Italian companies in China."

Euro decline

The decline of the euro against international currencies including the US dollar and the Chinese yuan also is making Italian companies attractive for foreign firms. The automotive and transport industry in Europe was one of the first sectors to lure interest from Chinese companies. It remains one of the top recipients, with more than $7 billion worth of deals through the end of 2014, including Dongfeng Motor Corp.’s investment in French carmaker PSA Peugeot Citroen, according to a report from Baker and McKenzie.

Chinese global cross-border acquisitions topped $73.3 billion in the last 12 months, up 26%, Bloomberg data show. In November, State Grid Corp. of China completed the purchase of a stake in Italian energy grids holding company CDP Reti SpA for €2.1 billion, the biggest Chinese investment in Europe in 2014.

Blue chips

Six months earlier, state lender Cassa Depositi and Prestiti SpA’s strategic fund sold a 40 percent stake in Ansaldo Energia SpA, formerly owned by state-controlled defense holding Finmeccanica SpA, to Shanghai Electric Group Co.

People’s Bank of China has stakes in some of Italy’s biggest companies, including Fiat Chrysler Automobiles NV, Telecom Italia SpA and Assicurazioni Generali SpA, as well as Eni SpA and Enel SpA.

China’s purchases represented 27% of foreign investment in Italy in 2014, according to KPMG Llp. Those deals included the acquisition of fashion house Krizia SpA by Shenzhen Marisfrolg Fashion Co.

“The trend will continue because, from one side, the brands of Italy have a long story, are respected all over the world, and as Chinese we need this," Zhu Chongyun, chairman of Shenzhen Marisfrolg Fashion, said last month in a Bloomberg TV interview in Milan at Krizia’s headquarters.

“And from the other side, in China, after 20 years of reforms, we also have a lot of excellent entrepreneurs." Bloomberg