All the plans of the German Rheinmetall with Leonardo on Oto Melara and Wass
What Armin Papperger, CEO of German defense giant Rheinmetall, said in relation to the sale of Leonardo's subsidiaries
Rheinmetall is targeting Oto Melara and Wass, the two controlled land and naval armaments put up for sale by Leonardo.
“We can collaborate with Oto Melara and, in torpedoes, with Wass. We can invest to have the whole company or even a minority stake ". This is said by the CEO of the German defense giant, Armin Papperger, who explained to the Sole 24 Ore that he had met Leonardo's CEO, Alessandro Profumo, “several times, also this year. We talked about the Italian market. We can do something together and do it quickly ”.
According to the Confindustria newspaper, Rheinmetall's proposal is to acquire 49% of Oto Melara and Wass from Leonardo, with an option for a further 2%.
A few days ago the Reuters agency had reported – taking up three sources close to the issue – that Leonardo's plan to find a buyer for the Oto Melara and Wass divisions had been put on standby in the context of the crisis caused by the Russian invasion of Ukraine . "The matter is suspended due to the war," one of the sources told Reuters .
But the Russian invasion of Ukraine could accelerate plans for the consolidation of European defense .
All the details.
THE SALE OF OTO MELARA AND WASS
Last year the Italian defense and aerospace group put its two land and naval armaments subsidiaries (now Defense Systems business unit) up for sale.
Oto Melara and Wass, which produce naval guns and torpedoes respectively, employ more than 1,500 workers in four Italian plants (La Spezia, Brescia, Livorno and Pozzuoli). Since 2016 they have both been part of Leonardo's Defense Systems division. The division's turnover is approximately 550 million euros.
After completing the acquisition of 25.1% of Hensoldt , a German defense electronics company, the group led by Alessandro Profumo is looking to sell the former Oto Melara and Wass. Both the Franco-German consortium Knds and the Italian Fincantieri have expressed interest in the two divisions. In the background, also the interest of another German player: Rheinmetall Italia.
Indeed, Fincantieri's offer for Oto Melara and Wass informally includes Rheinmetall. In the event of the award of the former Oto Melara, the shipbuilding group led by Giuseppe Bono will need a terrestrial partner and that can only be Rheinmetall given the joint operation on the Thyssenkrupp (Tkms) shipbuilding division, active in the construction of submarines. Regarding the Tkms dossier, according to the Handelsblatt newspaper, the three-way negotiation between Tkms, Fincantieri and the German defense conglomerate Rheinmetall has vanished. But the game shouldn't be over according to Papperger. “I don't think there have been any developments in the last two months,” the CEO of Rheinmetall told Sole 24 Ore .
RHEINMETALL'S PROPOSALS TO LEONARDO
Returning to Rheinmetall's plans in Italy, Papperger stressed that “it would be good if Rheinmetall could increase investments in Italy. You can only invest if you have a partner. We could find cooperation with Oto Melara. I'm happy to buy even a minority ".
Furthermore, the German manager relaunches “Italy could play a role in Europe. Must refurbish the Army light tanks, with the Ifv, our Lynx family would be suitable. The intellectual property would remain in Italy. I'm not working to join a program that is over after 5 years, but to establish a long-term relationship ”.
The German group had already informally expressed to the government its interest in Oto Melara for an industrial collaboration, with the aim of participating in the programs of the new tanks (the new light tank for the Aifv and MGCS Army).
But Leonardo might prefer to be a partner of Oto Melara Knds in Rheinmetall fearing competition in electronics, a business in which the Piazza Monte Grappa group aims for leadership .
COMPETITION PROBLEM IN ELECTRONICS FOR THE FORMER FINMECCANICA
“Knds is potentially an interesting partner because it has a role in the Main battle tank program and does not compete with Leonardo on electronics,” Profumo said in a parliamentary hearing on the sale of Oto Melara and Wass last December.
“We produce sensors, but they are not exactly the same as Leonardo's. We can be flexible. I could integrate Leonardo's technologies where they are missing. The aggregator of the strategy would be Rheinmetall Italia ”replied the CEO of Rheinmetall.
PARTICIPATION IN THE MGCS
Then, when asked whether the Italian industry could participate in the future European heavy tank, the MBT or MGCS, "the program – replied Armin Papperger – is expected from 2035. Italy could play an essential role, not only among 15 years, even in the ongoing study phase. Our proposal for the Lynx foresees the transfer of technology to Italy ”.
THE AGREEMENT OF THE DRAGHI GOVERNMENT IS NECESSARY
Finally, the political unknown.
Last week Reuters recalled that the Italian government, which controls both Leonardo (through the Mef at 30%) and Fincantieri, wants to have a say in the agreement for the future of Oto Melara and Wass. The executive has in fact initiated an interminesterial table between Mef, Mise and Defense to closely monitor the sales process. This was announced by Defense Minister Lorenzo Guerini (Pd) in the Chamber at the end of November 2021.
In particular, Rome wants to have a role in a consortium at European level for land military equipment, in which some of the assets of Oto Melara and Wass could be folded. "I am open to creating a partnership in Italy" remarked the German manager. “Of course we need the government agreement, to which we have explained our position. Our relationships are long-term ”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/tutti-i-piani-della-tedesca-rheinmetall-con-leonardo-su-oto-melara-e-wass/ on Wed, 16 Mar 2022 10:57:02 +0000.