Saudi PIF Advances Investment in Leonardo's Aerospace Unit

According to Bloomberg, 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.

The Public Investment Fund (PIF) is close to sealing a deal for a stake in the Italian aerospace company’s division, which produces critical structural components for aircraft like Boeing’s 787 Dreamliner. The discussions, which have progressed significantly since early 2025, could value the investment in the hundreds of millions of euros, the people said, asking not to be named discussing confidential information.

A key component of the potential agreement involves Leonardo establishing a civil aviation manufacturing facility in Saudi Arabia, potentially in Riyadh or near King Khalid International Airport. This would bolster the Kingdom’s ambitions under Vision 2030 to develop a domestic aerospace industry, create high-tech jobs, and attract foreign expertise. The aerostructures unit, which employs around 4,000 workers across four plants in southern Italy, generated €784 million ($850 million) in revenue last year but has struggled with losses tied to U.S. supply chain disruptions at Boeing.

Leonardo CEO Roberto Cingolani hinted at the partnership during a recent earnings call, stating the company has identified a strategic investor for the unit and will provide more details in its March 2026 strategy update. The Italian firm already has a foothold in Saudi Arabia through a January 2025 memorandum of understanding to expand aerospace and defense collaborations, including joint ventures in drones and AI-based systems with Turkish firm Baykar.

For PIF, the investment fits into its broader playbook of global deals that repatriate technology to Saudi Arabia - similar to recent stakes in electronics manufacturing and defense projects. The fund, which manages over $925 billion in assets, has ramped up aerospace investments to support giga-projects like NEOM and the Red Sea Development. If finalized, this could mark one of PIF’s largest European tech acquisitions this year, potentially unlocking billions in downstream opportunities for Saudi manufacturing.

Leonardo and PIF declined to comment. Shares in Leonardo rose 1.2% in Milan trading on the news, while PIF’s portfolio remains closely held. The deal, if completed, would deepen Italy-Saudi ties, building on a $10 billion investment pact signed during Italian Prime Minister Giorgia Meloni’s January 2025 visit to Riyadh.