EU approves Pirelli’s jv for tyre facility in Saudi Arabia

Pirelli The European Commission has approved, under the EU Merger Regulation, the creation of a joint venture by Italy’s Pirelli Tire S.p.A. and the Saudi Arabia’s Public Investment Fund.

The US$550 million deal relates primarily to the production and sale of tyres in Saudi Arabia with Pirelli to hold a 25% stake in the jv.

The Commission concluded that 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 transaction was examined under the simplified merger review procedure.

The joint venture aims to set up a manufacturing facility in Saudi Arabia to commence by 2026. The facility will have an output of 3.5 million units/year.

The Saudi Arabian market has seen other activity such as Black Arrow and Kumho Petrochemicals jv that is planning to build, subject to approval, a EUR1.4 billion plant in Yanbu, to commence construction this year.