Bloomberg: Saudi Arabia near deal to invest in Italy's defence giant Leonardo

Saudi Arabia’s Public Investment Fund (PIF) is in active talks to invest in Italian major defence firm Leonardo’s aerostructures division, according to sources familiar with the matter.

Under the proposed deal, the two parties would establish a global unit for aerostructure production, the people told Bloomberg, asking to remain anonymous as the matter is private.

Sources said negotiations are largely complete, with a key meeting between Italian Prime Minister Giorgia Meloni and Saudi Crown Prince Mohammed bin Salman at a Gulf summit in Bahrain on December 3 expected to play a pivotal role in securing final government approvals.

For Saudi Arabia, collaborating with Leonardo would provide increased exposure to a major global manufacturing sector as Crown Prince bin Salman seeks to diversify the kingdom’s economy beyond oil.

For Leonardo, the deal could provide crucial financial support for a division that has been facing losses. The unit supplies major structural components for Boeing’s 787 Dreamliner, though production slowdowns in the United States had negatively impacted the division’s performance. Boeing is now ramping up output of the widebody jet.

Bloomberg previously reported that one potential outcome of the partnership could see Leonardo building a civil aviation manufacturing facility in Saudi Arabia. The Gulf state has also expressed interest in joining the development of a next-generation fighter jet, a project on which Leonardo is collaborating with partners in the UK and Japan.

By Khagan Isayev