PIF in early talks to acquire Italian aircraft parts maker: The Public Investment Fund (PIF) has reportedly entered into discussions with Italian state-backed industrial giant Leonardo to acquire its cash-strapped aerostructure unit, Bloomberg reports, citing people it says are familiar with the matter. The ongoing talks may include plans to build a civil aviation manufacturing plant in Saudi Arabia, the people said.

The timing checks out: The sources said delegates from the PIF toured Leonardo’s southern Italy facilities earlier this week, just as CEO Roberto Cingolani — who recently confirmed securing a new investment partner — prepares to unveil details at the company’s strategy update on Tuesday, 11 March.

Throwing a lifeline: The PIF’s potential investment would provide much-needed financial support for Leonardo’s struggling aerostructure division which supplies key parts for Boeing’s 787 Dreamliner and Airbus A220 but has been hit by US production slowdowns.

A foot in the door for Saudi’s fighter jet ambitions: An agreement would pave the way for the Kingdom to be included in Leonardo’s next-generation fighter jet program, which is currently being developed with British and Italian partners.

About Leonardo: Founded in 1948, Leonardo, which is 30% owned by the Italian government, operates through five main divisions — Helicopters, Aircraft, Aerostructures, Electronics, and Cybersecurity. Its Aerostructures arm focuses on producing and assembling major structural components for commercial and military aircraft.

By the numbers: Leonardo’s aerostructure division employs some 4k people across four plants in southern Italy. The company reported revenues of EUR 746 mn last year and an EBITDA loss of EUR 151 mn.

REMEMBER- Italian Prime Minister Giorgia Meloni visited the Kingdom in January where she and Crown Prince and Prime Minister Mohammed bin Salman inked USD 10 bn worth of agreements, including a USD 3 bn multi-currency facility agreement from Sace to Neom backed by nine international banks.

ALSO IN M&A-

#1- The shareholders of South African construction equipment outfit Barloworld rejected Jeddah-based Zahid Group’s takeover offer, which had proposed purchasing all shares at ZAR 120 apiece, valuing the company at some USD 1.3 bn, according to a press release. The rejection triggered a standby offer by the Zahid consortium at the same price. Bloomberg also has the story.

What swayed the vote: The transaction failed to meet the 75% approval threshold, with key shareholders — including the Public Investment Corp., which holds a 22% stake — rejecting it due to concerns over corporate governance and the board’s handling of the transaction. Other investors, such as London-based Silchester International Investors, had previously stated their refusal to sell for less than ZAR 130 per share.

IN CONTEXT- Heavy equipment distributor Zahid and Entsha placed a bid to fully acquire Barloworld in December 2024, offering a 30% premium on its last closing price and a ZAR 3.10 dividend. Zahid, holding a 19% stake in the firm, was looking to reap gains from an uptick in construction activity in the African market, projected to expand 27% by 2029 on the back of government outlays for infrastructure and strong consumer demand.

#2- Saudi Tourism Development to fully acquire Manafea: Saudi Tourism Development(STDC) is acquiring the remaining 70% stake in Manafea Andalus for Development and Real Estate Investment from Tadawul-listed developer AlandalusProperty for SAR 15 mn, Alandalus said in a disclosure to the bourse. STDC already holds a 30% stake in Manafea. The sum will be paid out in three equal installments, with Alandalus set to use the proceeds to finance its expansion projects.

About Manafea: Manafea’s primary focus is managing and operating leasing for commercial centers across the Kingdom. The company’s net income more than doubled in 2023, coming in at SAR 1.5 mn, according to the filing. The company’s asset book value stood at SAR 17.4 mn as of the end of 2023.

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