Shipbuilding company Fincantieri signs underwater defense contract
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Italy's Fincantieri has acquired defense group Leonardo's submarine force at a valuation of up to 415 million euros, as Europe's largest shipbuilder looks to build out its military business.
The agreement is for Fincantieri to pay Leonardo 300 million euros, as well as additional amounts of up to 115 million euros depending on certain goals achieved this year. It was announced on Thursday night with a funding of 100 million euros. The funding round, backed by state investor Cassa Depositi e Prestiti, will finance the group's acquisition.
Mr. Fincantieri's acquisition of Wass, a Tuscan-based underwater missile and sonar manufacturer, will strengthen the state-owned company's defense and security activities. The company manufactures not only submarines but also cruisers and warships, and is aiming to expand its underwater business.
This comes as governments seek to protect critical underwater infrastructure assets such as communications cables and energy pipelines from fraudulent actors.
of war in ukraine And the 2022 Nord Stream pipeline disruption incident highlighted the importance of underwater safety. The use of underwater drones is increasing in the Black Sea, and the conflict highlights the importance of underwater defense.
The Italian government is also aiming to streamline underwater security systems and is establishing a national research center to foster business opportunities in this field.
Leonardo, under CEO Roberto Cingorani, is selling non-core assets and eyeing acquisitions. The company is also under government control and is looking to strengthen partnerships with other defense contractors across Europe and focus on its technology platform.
Fincantieri and Leonardo also have a joint venture called Orizzonte Sistemi Navali, which manufactures warship systems.
The Italian shipyard identified underwater security as a key growth pillar in its new business plan announced last year. The defense sector currently accounts for a quarter of the company's revenue of 7.6 billion euros.
In his presentation, Fincantieri estimated that the value of the global underwater sector, which includes defence, telecommunications, energy and oil and gas, could reach up to €400 billion by 2030, with defense leading the way. playing a role. The company's stock price has increased by almost a third. Since its release.
In February, Fincantieri completed the acquisition of Remazel Engineering, a company based north of Milan that specializes in the design and supply of highly complex topside equipment. The group now plans to accelerate growth through further acquisitions funded by Thursday's capital increase, according to people familiar with the plans.
After years of posting hundreds of millions of dollars in losses, Fincantieri reported a net loss of 53 million euros in 2023, a significant improvement compared to the previous year's loss of 324 million euros. . Chief Executive Officer Pieroberto Forgero, who will take the helm from mid-2022, said the achievement was “the result of financial discipline and the solid operational performance of military and civilian shipbuilding.”
Fincantieri's shares fell 7.5% in the afternoon on concerns about the size of the recapitalization reported in Italian media on Thursday.
Summarize this content to 100 words Unlock Editor's Digest for freeFT editor Roula Khalaf has chosen her favorite stories in this weekly newsletter.Italy's Fincantieri has acquired defense group Leonardo's submarine force at a valuation of up to 415 million euros, as Europe's largest shipbuilder looks to build out its military business. The agreement is for Fincantieri to pay Leonardo 300 million euros, as well as additional amounts of up to 115 million euros depending on certain goals achieved this year. It was announced on Thursday night with a funding of 100 million euros. The funding round, backed by state investor Cassa Depositi e Prestiti, will finance the group's acquisition. Mr. Fincantieri's acquisition of Wass, a Tuscan-based underwater missile and sonar manufacturer, will strengthen the state-owned company's defense and security activities. The company manufactures not only submarines but also cruisers and warships, and is aiming to expand its underwater business.This comes as governments seek to protect critical underwater infrastructure assets such as communications cables and energy pipelines from fraudulent actors. of war in ukraine And the 2022 Nord Stream pipeline disruption incident highlighted the importance of underwater safety. The use of underwater drones is increasing in the Black Sea, and the conflict highlights the importance of underwater defense.The Italian government is also aiming to streamline underwater security systems and is establishing a national research center to foster business opportunities in this field. Leonardo, under CEO Roberto Cingorani, is selling non-core assets and eyeing acquisitions. The company is also under government control and is looking to strengthen partnerships with other defense contractors across Europe and focus on its technology platform. Fincantieri and Leonardo also have a joint venture called Orizzonte Sistemi Navali, which manufactures warship systems. The Italian shipyard identified underwater security as a key growth pillar in its new business plan announced last year. The defense sector currently accounts for a quarter of the company's revenue of 7.6 billion euros. In his presentation, Fincantieri estimated that the value of the global underwater sector, which includes defence, telecommunications, energy and oil and gas, could reach up to €400 billion by 2030, with defense leading the way. playing a role. The company's stock price has increased by almost a third. Since its release.In February, Fincantieri completed the acquisition of Remazel Engineering, a company based north of Milan that specializes in the design and supply of highly complex topside equipment. The group now plans to accelerate growth through further acquisitions funded by Thursday's capital increase, according to people familiar with the plans. After years of posting hundreds of millions of dollars in losses, Fincantieri reported a net loss of 53 million euros in 2023, a significant improvement compared to the previous year's loss of 324 million euros. . Chief Executive Officer Pieroberto Forgero, who will take the helm from mid-2022, said the achievement was “the result of financial discipline and the solid operational performance of military and civilian shipbuilding.”Fincantieri's shares fell 7.5% in the afternoon on concerns about the size of the recapitalization reported in Italian media on Thursday.
https://www.ft.com/content/9504041f-eef3-4be9-a211-bcd5aabdf7a6 Shipbuilding company Fincantieri signs underwater defense contract
