Pirelli Forms Joint Venture With Trelleborg For Pirelli's Italian Facility In Tivoli

Milan, November 3, 1998 - Pirelli Tyres and Trelleborg announced today the signing of a joint venture agreement covering the production and sales activity of Pirelli's Tivoli facility in Southern Italy, operating in agricultural tyres. The new company, which is currently being constituted and will be named Trelleborg Wheel Systems SpA, will strengthen both Pirelli's and Trelleborg's brand market positioning, adding to Pirelli's radial tyre offer Trelleborg's product line which includes tyres for agricultural, forest and industrial use. Consequently, the joint venture will allow a wider coverage of different market segments, in order to fully exploit the positive trends in the European market. Trelleborg Wheel Systems's offer will thus provide a complete range of products to its client portfolio, including the world leading tractors manufacturers, such as New Holland, John Deere, Fendt, Case, SAME, etc, and new O.E.s.

The joint venture will be controlled 60% by Trelleborg, a leading Swedish industrial Group operating in the automotive, tyre, engineering and building fields, and 40% by Pirelli Tyres. The two brands will sell agricultural tyres for a total turnover of approximately 300 billion lira.

In order to support the activity of the Tivoli plant, the agreement also foresees new investments exceeding 30 billion lire over the next 3 years, and the launch of new products.

Pirelli Tyres will keep operating directly and indipendently in the agricultural tyre business through its other existing facilities in South America and Turkey, with its full range offer.