Saudi Arabia’s sovereign wealth fund is in advanced talks to invest in Leonardo SpA’s aerostructures unit following months of negotiations, according to people familiar with the matter.
Under the deal being discussed, the two parties would create a global unit for aerostructure works, said the people, asking not to be identified discussing a private matter. The talks between the Italian defence contractor and the kingdom’s Public Investment Fund, reported earlier this year by Bloomberg, are largely complete, they said.
A planned meeting between Italian Prime Minister Giorgia Meloni and Saudi Crown Prince Mohammed bin Salman at a Gulf summit in Bahrain could be pivotal in securing final government approvals, the people said.
Representatives for Leonardo and the Italian government, which owns 30% of the company, declined to comment, while officials at the Saudi fund didn’t immediately respond to a request for comment outside of regular business hours in the country. Working with Leonardo would give the Gulf kingdom greater exposure to a key global manufacturing industry as Prince Mohammed seeks to diversify Saudi Arabia’s economy from oil.
For Leonardo, a deal would bring financial support for a division that’s been losing money. It supplies major structural parts for Boeing Co’s 787 Dreamliner, but suffered losses partly tied to a production slowdown in the US.
That has affected activity at Leonardo’s plants, though Boeing is now ramping up output again of the widebody jet. Leonardo’s aerostructures division employs about 4,000 people in four Italian plants. It had 2024 revenue of €746mn ($784mn).
One possible outcome is for the Italian aerospace firm to build a civil aviation manufacturing plant in Saudi Arabia, Bloomberg reported in February. The kingdom is also keen to participate in a next-generation fighter jet, a costly project on which the Italian company is working with partners in the UK and Japan.
Italy and Saudi Arabia have recently deepened economic ties. A meeting between the two leaders in January paved the way for deals valued at about $10bn.