Leonardo will sell Wass to Fincantieri

Fincantieri will buy from Leonardo Wass (Whitehead Alenia systems subaquei), the naval armaments subsidiary of the former Finmeccanica, a leading company in the production of torpedoes, sonar and underwater defense systems.

“We plan to speed up, we’re talking about days and not months, because we would like this matter to be closed.” This was stated by Leonardo’s CEO, Roberto Cingolani, who spoke today at a conference organized by Uilm in Genoa on the “Future of the Ligurian defense industry”.

“We are talking about days, not months,” Cingolani underlined to journalists, thus confirming last month’s rumors according to which the Trieste naval group was negotiating with Leonardo the acquisition of Wass for an operation that could require a capital increase . The operation should have a value of between 200 and 300 million euros, he writes today Reuters.

The Trieste-based shipbuilding group has identified underwater activities as one of the main lines of development, with the desire to position itself as a leader in the underwater domain within the national diving hub in La Spezia, inaugurated last December.

Cingolani explained that there had been a slowdown in negotiations due to “temporary resistance” from internal managers, but added that he was in direct contact with his counterpart, Pierroberto Folgiero of Fincantieri.

All the details on the new chapter in the collaboration between the two national defense giants in the underwater sector.

WHAT WASS DOES

Wass is the Livorno-based company active in the underwater defense industry that produces torpedoes and sonars. Today it employs 450 people. Since January 1, 2016, Wass’ activities have merged into the Defense Systems division, within the Electronics, Defense and Security Systems sector of Leonardo, the former Finmeccanica, together with Oto Melara.

The potential agreement with Fincantieri would not include Oto Melara, about which in the past there had been rumors of interest on the part of the Trieste shipbuilding group.

In fact, in 2021 Leonardo had put Oto Melara and Wass, the two land and naval armaments subsidiaries, up for sale, a sale that has remained on stand-by until now. Oto Melara and Wass, which produce naval guns and torpedoes respectively, employ more than 1,500 workers in four Italian factories (La Spezia, Brescia, Livorno and Pozzuoli). The division’s turnover is approximately 550 million euros. In particular, Wass is responsible for the development of the Black Shark torpedoes, those that will equip the U212 NFS (Near Future Submarine) submarines of the Italian Navy made by Fincantieri.

THE NUMBERS

The former Whithead Sistemi Subacquei activities which are the subject of the negotiation between Leonardo and Fincantieri generate revenues of around 150-200 million euros. This is what we learn from financial sources on the scope of defense activities in the underwater domain headed by Leonardo which the group could sell to Fincantieri, revealed today Radiocor.

Starting from autumn 2015, Wass’ assets were merged into Leonardo Spa and until then had a book value of 25 million, in line with the historical cost. In the last approved financial statement of Wass Spa for 2014, revenues were around 106 million and in previous years they were in the 120-130 million area.

THE VALUE OF THE OPERATION

According to press rumors at the beginning of March, the acquisition of Wass by Fincantieri will be carried out for the shipbuilding group through a capital increase in a range of 300-500 million euros which could also contribute to reducing the debt which at the end of 2023 should stand at 2.7 billion euros.

The Only 24 hours had quantified the operation for the acquisition of the Livorno company at 250-300. Also the Courier there was talk of an acquisition worth 200-300 million to the studio. A figure that the shipbuilding group could finance with a capital strengthening or the issue of a convertible bond, reports the Courier.

For the MessengerFincantieri was studying a capital operation of the order of 400 million to finance the operation, assisted by JPMorgan, Intesa Sanpaolo and Bnp Paribas.

ALREADY POWERED BY FINCANTIERI IN THE BONO ERA

It is not the first time that such an operation has been discussed.

In 2021, Leonardo’s negotiation with the Franco-German consortium Knds for the sale of the Defense Systems division had shaken the political world, as well as the trade union world. At the time there were rumors, never denied by Leonardo, of a probable sale of the Defense Systems to Fincantieri, led at that time by the CEO Giuseppe Bono. In this hypothesis, it would be an operation involving two Italian companies, both controlled by the MEF through CDP.

However, the game for the acquisition of Leonardo’s Defense Systems division crossed national borders and the negotiation had expanded beyond the two state subsidiaries. The Franco-German consortium Knds had also presented Leonardo with an offer to purchase Oto Melara for around 650 million euros. In May, German Rheinmetall also presented a non-binding offer to Leonardo worth between 190 and 210 million euros for the former Oto.

For the offer of Fincantieri, a group controlled by Cdp Equity with 71.32%, there was therefore talk of the need for a capital increase supported by its main shareholder Cdp. In 2021 a recapitalization of this magnitude compared with Fincantieri’s then market capitalization of around 1 billion euros.

ALL FINCANTIERI SHOPPING

As already mentioned, the operation would be part of Fincantieri’s broader strategy to grow through acquisitions and focus more on the defense sector.

The operation would in fact follow the recent acquisition of Remazel Engineering, a leading engineering company in the design and construction of offshore equipment, cranes and turbine components. With that operation, Fincantieri thus intended to accelerate the growth of its technological, engineering and construction skills in the offshore and subsea sectors.

“The operation represents the first important piece of the development strategy in the sector of offshore and subsea technological operations, while promoting the consolidation in Italy of one of the excellences of the national industrial sector” commented Pierroberto Folgiero.

The acquisition of Wass would therefore represent a further move that fits into the strategy outlined by the CEO of the shipbuilding group in which Fincantieri aims to become “the locomotive of this new supply chain” in the underwater sector having already built 180 submarines.