Italy backs Fincantieri involvement in sale of Leonardo units-sources

  • 12/16/2021
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ROME, Dec 16 (Reuters) - The Italian government backs the involvement of shipbuilder Fincantieri (FCT.MI) in the sale of Leonardo"s (LDOF.MI) OTO Melara and Wass units, two sources told Reuters, in an effort to safeguard what it considers strategic assets. The Franco-German consortium KMW+Nexter Defence Systems (KNDS) is conducting due diligence on the two units and could soon submit a 650-million-euro ($732.23 million) offer, aiming to strengthen its position in the land defence sector. read more However, the Italian government - which controls both Leonardo and Fincantieri - is unwilling to leave OTO Melara and Wass entirely in the hands of a foreign group and is ready to back the shipbuilder"s involvement in the operation, sources have said. "The ministry is promoting ... actions aimed at safeguarding a national presence and ensuring a highly competitive technological base in the defence sector," Defence Minister Lorenzo Guerini told parliament on Wednesday when asked about the matter. He added the government would be ready to use its special anti-takeover legislation, the so-called Golden Power, to shield key assets. read more Fincantieri expressed interest in the two units in late October, one of the two sources said, indicating it was ready to spend 450-550 million euros and it would likely need a capital increase to support the investment. Union sources have suggested that Leonardo, Fincantieri and KNDS could work together in order to protect both jobs and the Italian interest, but people familiar with the matter have signalled that Fincantieri is not ready to partner with KNDS. "They don"t want to share the assets with KNDS," a government official said. Fincantieri declined to comment. The defence ministry pointed to the minister"s comments on Wednesday when he told parliament that discussions were at a preliminary stage and an overall strategy would be laid down after binding offers. Leonardo was not immediately available to comment. OTO Melara and Wass make cannons and torpedoes and unions fear a sale could lead to a potential split of the two divisions" land, naval, underwater and munitions" businesses, putting at risk some of the 1,500 jobs across the two units. As part of its proposal, KNDS has offered to include Italy in the Main Ground Combat System (MGCS) tank project, an option that would give Leonardo the possibility of offering its sensors and electronics for the new tank. OTO Melara would also fit into KNDS" portfolio and strengthen its hand in a 2.2 billion euro contract that the Italian army is due to launch for the development of a new tank. ($1 = 0.8877 euros)

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