Pirelli sells to Reunert 50% of Afcab

Pirelli Sells to Reunert Its 50% Stake in Afcab Holdings, South African Energy Cable Maker

Milan, 14 July 2004 - Pirelli sold today its 50% non controlling stake in Afcab Holdings, the sole shareholder of the South African energy cable maker African Cables Limited, to the controlling shareholder Reunert Limited for Rand 165,75 million (about 21,8 million).

Afcab Holdings was initially a joint-venture between Siemens and Reunert, a South African electrical engineering and electronic group. Pirelli took over its stake in Afcab Holdings in 1998, when the Italian company bought Siemens' assets in the energy cable business. Pirelli decided to dismiss this stake not having the management of the company, preferring to focus on more strategic markets.

The transaction is subject to the approval of the competent authorities.