The title runs on Piazza Affari Fincantieri. At mid-morning, the shipbuilding company's shares gained 4,3%, supported by rumors relating to negotiations, at an advanced stage, for the acquisition of Wass da Leonardo (+0,34%). However, the potential agreement would not include Oto Melara, in which there had been rumors of interest from Fincantieri in the past.
With the sale of Wass, Leonardo would disengage from a non-strategic activity, marginally improving the financial situation. Fincantieri for its part is growing more and more in Defense, which today is worth around 40% of its turnover.
The Fincantieri-Leonardo operation on Wass
Wass operates in the manufacturing industry underwater defense producing torpedoes and sonars. According to Equita, Fincantieri's interest in Wass had been known for some time and would be part of the management's strategy to strengthen the defense business (which today represents around 40% of turnover). On January 2016, XNUMX, Wass' activities merged into the division Defence Systems, within the Electronics, Defense and Security Systems sector of Leonardo, the former Finmeccanica.
In detail, the operation can be "the trigger for the start of an extraordinary operation to strengthen the financial structure", underlines Equita.
Brokers estimate, even before the possible M&A operation, a leverage the “Nd/Ebitda ratio at the end of 6 by 2023 times which will drop to around 4 times at the end of 2025 while still remaining at high levels".
In this regard, other press rumors are highlighted according to which Cdap (shareholder of Fincantieri with a 71,3% stake) may not follow the capital increase in full while maintaining the majority in order to increase the free float. A final decision is expected between the end of April and the beginning of May.
“For Leonardo – continues Equita – Wass represents a small business unit within the defense division for which updated numbers are not available. If the rumors are confirmed, we believe that the sale could make strategic sense while waiting to understand what the financial resources are for."
Per Intermonte the acquisition would be consistent with Fincantieri's strategy to strengthen itself in the naval/military business and with the agreement between the two groups based essentially on the separation "between the underwater domain and activities above sea level". Furthermore, they point out, the European defense plan announced yesterday provides limited funds and does not contain any particular innovations. However, the objective of increasing procurement towards European companies from the current 20% to 50% in 2030 is potentially worth over 100 billion euros per year of increased spending towards European companies”.
