Pirelli SpA (PC.MI) said Friday it has signed a memorandum of understanding with Russia's Sibur Holding to set up a tire-making joint venture.

The agreement also involves related ventures making steelcord and synthetic rubber derivatives for industrial use, the Italian company said.

Sibur Russian Tyres, a unit of the Russian petrochemical group, will confer some assets to two joint ventures constituted by Pirelli and Russian Technologies, a state-owned company.

One of the ventures will likely be able to make up to 3 million car tires by the end of next year, Pirelli said.

Sibur Holding, which is controlled by Gazprombank (GZPR.RS), will agree to be a long-term supplier to Pirelli and the two joint ventures, the Italian company said.

The new tire-making company may eventually buy or merge with Nizhnekamshkshina, a producer controlled by Tatneft (TATN.RS), Pirelli said.

-By Christopher Emsden, Dow Jones Newswires; +39-06-6976-6921; chris.emsden@dowjones.com
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