China's biggest state-owned chemical firm on Monday announced it will buy Germany's KraussMaffei Group, which makes machinery for producing plastics and rubber, for 925 million euros ($1.0 billion). China National Chemical Corp, also known as ChemChina, said the planned acquisition would mark the largest investment ever in Germany by Chinese companies.

The Chinese government has encouraged its state companies to invest overseas to secure supplies of raw materials and gain expertise in international business. ChemChina last year announced the acquisition of Italian tyremaker Pirelli in a 7.4 billion euro deal. ChemChina - one of more than a hundred state-owned enterprises which reports directly to the central government - has formed a consortium with Guoxin International Investment Corp and AGIC Capital to acquire the German company from private equity firm Onex Corp, the statement said.

Copyright Agence France-Presse, 2016