Shipbuilder Fincantieri set to strike underwater defence deal
Italian state-controlled group expected to acquire underwater missile and sonar business from Leonardo
Italy’s Fincantieri is set to acquire the submarine unit of defence group Leonardo for around €350mn, as Europe’s largest shipbuilder seeks to build its military business.
The agreement, along with Fincantieri’s latest capital raise of up to €500mn, is set to be announced on Thursday evening, according to three people close to the deal. The funding round, backed by state investor Cassa Depositi e Prestiti, will finance the group’s acquisition.
Fincantieri’s purchase of Tuscany-based WASS, which makes underwater missiles and sonars, will strengthen the state-controlled company’s defence and security operations. The company manufactures both cruise and military vessels as well as submarines, and aims to expand its underwater business.
It comes at a time when governments are seeking to protect critical underwater infrastructure assets such as telecommunication cables and energy pipelines from rogue actors.
The war in Ukraine and the 2022 Nord Stream pipeline sabotage incident have highlighted the importance of underwater security. With more underwater drones being used in the Black Sea, the conflict has underlined the importance of underwater defences.
The Italian government is also seeking to streamline its underwater security systems, establishing a national research centre to foster business opportunities in the sector.
Leonardo, under chief executive Roberto Cingolani, has been divesting non-core assets and eyes acquisitions. The company, which is also controlled by the government, has been looking to strengthen partnerships with other defence contractors across Europe and focus on its technology platform.
Fincantieri estimates the global underwater sector, including defence, telecommunications, energy and oil and gas, to be worth up to €400bn — with defence playing a leading role — by 2030, according to an investor presentation published in March. Shares in the company have surged 30 per cent since the release.
Fincantieri and Leonardo also have a joint venture, called Orizzonte Sistemi Navali, which manufactures warship systems.
Shares in Fincantieri were down 7.5 per cent in the afternoon over concerns on the size of the recapitalisation reported earlier on Thursday by Italian media.
Fincantieri, Leonardo and CDP declined to comment.