Fincantieri’s Potential Acquisition of Leonardo’s Submarine Unit: A Strategic Move in the Defense Sector

Italian shipbuilder Fincantieri is reportedly in discussions with defense group Leonardo to acquire its submarine unit, Whitehead Alenia Sistemi Subacquei (Wass), a move that has sparked a surge in Fincantieri’s stock price by over 7%. The potential acquisition, estimated to be valued between 200 million and 300 million euros, signals Fincantieri’s strategic shift towards strengthening its presence in the defense sector and expanding its portfolio through acquisitions.

Reports from newspapers such as Corriere della Sera and Il Sole 24 Ore suggest that Fincantieri’s interest in Wass aligns with its broader goal of growth through strategic acquisitions, particularly in sectors with high potential like defense. Despite defense accounting for less than 25% of its revenues in the last financial results, Fincantieri sees it as a vital area for expansion, highlighting its commitment to diversifying its business operations.

To finance the potential acquisition, Fincantieri is considering a capital increase of around 400 million euros, according to reports from Il Messaggero. The involvement of financial advisors like JPMorgan, Intesa Sanpaolo, and Bnp Paribas underscores the seriousness of Fincantieri’s pursuit of Wass and its commitment to exploring all avenues to make the deal a reality.

While Fincantieri has not directly confirmed the talks with Leonardo, it issued a statement indicating its openness to strategic opportunities aligned with its business plan and aimed at enhancing shareholder value. This cautious approach reflects the company’s diligence in evaluating potential deals and ensuring they fit within its long-term growth strategy.

The acquisition of Wass would not only bolster Fincantieri’s position in the underwater defense sector but also contribute to its overall growth trajectory. Analysts at Banca Akros view the potential deal positively, estimating Wass’s value to be between 168 million and 225 million euros. This optimistic assessment underscores the strategic significance and potential financial benefits of integrating Wass into Fincantieri’s operations.

The reported discussions between Fincantieri and Leonardo come amid Leonardo’s efforts to divest Wass, a move initiated several years ago but put on hold due to geopolitical concerns arising from the conflict in Ukraine. Leonardo, also state-controlled like Fincantieri, has been seeking a suitable buyer for Wass, known for its expertise in designing and manufacturing underwater defense systems such as torpedoes and sonars.

The potential acquisition signals Fincantieri’s ambition to expand its capabilities and market presence, capitalizing on Wass’s expertise and technology in the underwater defense domain. By integrating Wass into its operations, Fincantieri aims to enhance its offerings, strengthen its competitive position, and capitalize on emerging opportunities in the defense sector.

For investors and stakeholders, the proposed acquisition represents a strategic move by Fincantieri to drive growth and unlock value. The positive market response, with Fincantieri’s stock experiencing a significant surge, reflects investor confidence in the company’s strategic direction and its ability to execute transformative deals.

Looking ahead, the outcome of the discussions between Fincantieri and Leonardo, as well as the potential acquisition of Wass, will be closely watched by industry observers and investors. If successful, the acquisition could reshape Fincantieri’s business landscape, positioning it as a key player in the defense sector and opening up new avenues for growth and innovation.