EU approves Pirelli’s tire joint venture in Saudi Arabia

Brussels – The European Commission has approved the creation of a joint venture by Pirelli Tyre SpA and Saudi Arabi’as Public Investment Fund (PIF), under the EU ‘merger regulation’.

The $550-million (€520 million) joint venture, with Pirelli holding a 25% stake in the business, primarily relates to the production and sale of passenger car tire in Saudi Arabia.

“The proposed acquisition would raise no competition concerns, given that the joint venture has no current or foreseen activities in the European Economic Area,” the Commission concluded.

Unveiled in October last year, the project will see Pirelli acting as strategic technology partner for the project.

Pirelli will help the development of the project by providing technical and commercial assistance, the Milan-based group announced at the time.

Set to commence production in 2026, the facility is designed to manufacture 3.5 million units of passenger car tires per year.

These will include “high-quality” tires under the Pirelli brand and tires under a new local brand for domestic and regional consumption.

No further details about the location of the plant have been disclosed.

Saudi Arabia has also been the focus of a separate, long-planned project to establish a major tire manufacturing facility at Yanbu on the Red Sea coast.

In March, officials of Blatco (Black Arrow Tire Co.) signalled that construction work on a €1.4-billion plant would start by mid-2024 – subject to approval by project partner Kumho (ERJ report).