Leonardo: the Franco-Germans of Knds torpedo Fincantieri on Oto Melara and Wass
The Franco-German consortium Knds has launched an offer to purchase Leonardo's Oto Melara and Wass units. According to rumors, it would be three times higher than that of Fincantieri. Facts, numbers, rumors and insights
Offered by Paris and Berlin for Oto Melara and Wass, the two units of the Italian defense giant Leonardo.
The Franco-German consortium Knds presented Leonardo an offer to buy Oto Melara, a historic manufacturer of cannons and armored vehicles, and Wass, which builds torpedoes and underwater drones.
Repubblica reports it today, explaining how "not only the maintenance of full employment, but also the entry of our country into the project for the new tank launched by Macron and Merkel" was put on the plate. Or "the euro-tank MGCS, which aspires to be the protagonist of a market worth over eleven billion euros".
According to the newspaper, French President Emmanuel Macron has already talked about it to Mario Draghi. Furthermore, Macron could return to address the topic at today's meeting in Paris.
But the Draghi government is also studying alternative hypotheses. “The Franco-German initiative risks putting two state-controlled companies, Leonardo and Fincantieri, with opposing interests on a collision course”, underlines Repubblica .
Since this summer, rumors have circulated that Fincantieri was talking to Leonardo about the possible acquisition of the unit, not considered a fundamental asset by Leonardo but considered strategic by the Italian shipbuilder.
So far, Leonardo's CEO Alessandro Profumo has refused to comment on the possible sale of Oto Melara.
Repubblica described Knds' offer as "more substantial" than Fincantieri's, and said it was worth up to three times as much.
According to the trade unions, giving up the division to European subjects would mean losing "a highly strategic sector, one of the main suppliers of the Italian armed forces" which employs 1500 direct and indirect workers.
All the details.
KNDS'S PROPOSAL FOR OTO MELARA AND LEONARDO'S WASS
According to Repubblica , Knds has also assured that it will maintain employment levels at Oto Melara and Wass.
We recall that Knds is the giant of the terrestrial military industry born from the union between the French Nexter and the German Krauss-Maffei Wegmann (Kmw).
WHAT OTO MELARA DOES IN THE SIGHT OF KNDS
In particular, Oto Melara produces the most common cannon on warships all over the world: the 76/62 purchased by the fleets of 53 countries, including the French and German ones. In addition, the company has developed “Volcano” technology which makes artillery shells very similar to missiles, with autonomous guidance in the final trajectory and an increased range.
Since 2016 Oto Melara has been part of Leonardo's Defense Systems division.
THE ACTIVITIES OF WASS
“Wass, on the other hand, produces torpedoes and drones, also in this case the company was merged in 2016 in the Defense Systems division” MF recalls.
ASSETS ASSESSMENT ACCORDING TO BANCA AKROS
"Banca Akros calculates that, if we assume a combined turnover of Oto Melara and Weiss of 520 million euros and an EBIT of 56 million, the valuation of this asset falls within the range of 520/560 million euros", reports MF .
A HIGHER OFFER THAN THAT OF FINCANTIERI
"According to rumors, the proposal of the Franco-German consortium would be much more consistent than that of Fincantieri".
"There is even talk of a figure three times higher", underlines Repubblica .
THE NEGOTIATION OF THE SHIPYARD GROUP LEADED BY GIUSEPPE BONO
"On the other hand, Fincantieri – recalled the 19th Century – has been collaborating with the former Oto Melara for some time: a few years ago a collaboration agreement in the military shipbuilding sector was signed between the navalmeccanico group and the then Finmeccanica, with the 'objective of increasing competitiveness on national and foreign markets through a more effective integrated offer of the products of the two companies, including those of the former Oto Melara ”.
"In this case the production structure would remain in Italy and in public hands" had previously highlighted the Corriere . "This would be an operation with two companies both controlled by the Mef through Cdp" underlined a note from Fiom-Cgil.
However, "the probability exists (never formally communicated or expressed) that Fincantieri is interested only in the naval part, therefore cannons and machine guns and ammunition together with torpedoes" commented an insider.
Furthermore, "according to rumors, the confrontation would have slowed down for a difference of 2-300 million between the offer of Giuseppe Bono and the requests of Alessandro Profumo" revealed Il Sole 24 Ore.
LEONARDO'S EXPENDITURE FOR HENSOLDT
In the meantime, Leonardo aims to increase collaboration with Germany after taking over 25% of Hensoldt, a German company leader in radar and surveillance sensors.
This is also why the former Finmeccanica is looking for liquidity. The transaction with Hensoldt will entail an outlay of approximately 606 million euros for the Piazza Monte Grappa group.
“The sale of Oto Melara would represent a further option for Leonardo. We would not be surprised if it were a German player in a sort of barter between Italy and Germany between defense electronics, Hensoldt, and defense systems ”, had previously hypothesized Banca Akros.
THE DOSSIER ON THE TABLE OF MACRON AND DRAGHI
But Leonardo's sale of Oto Melara and Wass is now part of a broader framework.
Knds' offer for Oto Melara and Wass is under discussion at the government level.
As Repubblica explains, "this is not a simple economic game, but a piece of the revision of all the balances within the Union with the attempt to cement an axis between Paris, Berlin and Rome that will take the lead in every field , starting from that of the defense ".
An urgency for Macron that according to Repubblica does not seem to be shared by the Italian government at the moment. The latter would rather “calmly evaluate all the options on the table.
OFFER PART OF A WIDER PROPOSAL
As part of the offer, Knds has offered to include Italy in the Franco-German tank project of the future (MGCS, Main Ground Combat Systems).
German-led, MGCS is one of two defense collaborations between France and Germany, which aims to replace the French Leclerc and the German Leopard 2 by 2035. The second program is the Future Combat Air System (FCAS), led by France, to which Spain has also joined.
ITALIAN ENTRANCE IN THE MGCS
Both Italy and Poland have repeatedly asked to join the MGCS program , but Paris and Berlin wanted to keep the project exclusively bilateral until the development of a prototype.
The imperfect is a must, given that now Macron himself would have shown openness towards the Italian requests for inclusion in the project of the European tank of the future.
“Even if the consortium that presented the offer is German-driven, Macron is pressing ahead with pressure on various capitals to immediately increase European defense cooperation. And collaboration in the military industry will be one of the chapters of the “Quirinale Treaty”, the agreement between France and Italy that is being defined in recent weeks ”underlines Repubblica .
WHAT STATE IS THE PROGRAM?
In the meantime, “the MGCS program is on hold pending the new German majority. Because the Bundestag did not want to finance this program last June before the German elections in September. Consequently, France and Germany are continuing the study of the overall architecture of the system, which began at the beginning of 2020 ”underlines the French newspaper La Tribune.
Furthermore, at the request of Germany, the Knds consortium had to integrate the German Rheinmetall into the MGCS project, La Tribune recalled .
WHAT WILL BECOME OF LEONARDO-IVECO'S PROPOSAL FOR THE ARMY?
Finally, the need to renew the fleet of armored tracked vehicles in Italy and Germany is also part of the risk of the European defense industry.
According to Rid , Leonardo recently presented together with Iveco Defense Vechicles an offer to the Italian Army for the Aics (Armored infantry combat system) program. The former Finmeccanica with Oto Melara works in consortium with Iveco Defense, CIO, leader of the land armaments industry. Iveco Defense would be “the only Italian alternative subject” in the negotiations for Oto Melara and Wass according to Repubblica .
The Aics program provides for the purchase of 679 armored tracked vehicles with which to replace the now obsolete IFV Dardo and M113. In the Defense Dpp 2021-2023, the government has budgeted 2.141 billion until 2035.
But even before Leonardo, the German Rheinmetall had also put forward his proposal at the beginning of the year.
Specifically, the company proposed the creation of an Italian pole of excellence through the consolidation of the national land sector. In other words, the “Transfer of technology and know-how in the tracked sector from Germany to Italy for the benefit of the national industry” is envisaged.
Rheinmetall and Italian industries (Leonardo ça va sans dire) would work on the Lynx platform. The company also assured that the Italian production quota can exceed 70% of the order value.
According to insiders, Leonardo is holding talks with Rheinmetall on his proposal for the Aics program.
I WANTED OF THE DEFENSE
As Repubblica recalls , in an interview with the newspaper “Chief of Staff Pietro Serino, the Army must renew all the armored forces and initial funds of two billion have already been allocated. This is why General Serino supports the need for "an Italian industry capable of participating in European consortia", recalling the words of Minister Lorenzo Guerini: "national sovereignty also passes through the defense industry" ".
Therefore, even the defense leaders would be more inclined to a project that does not see the Italian industry operate alone, but in collaboration with European players.
THE WORDS OF PERFUME
Vision also supported by the same number one of Leonardo. “To develop enabling strategic capabilities, safeguarding a national dimension,“ Italy cannot ignore international cooperation. The European economies of scale guarantee an adequate concentration of industrial and financial resources to support investments, with a wider reference market ”, underlined today the CEO of Leonardo in Sole 24 Ore . Concluding that "it is the only way to continue to protect the interests of the country in the face of new global challenges".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/leonardo-i-franco-tedeschi-di-knds-silurano-fincantieri-su-oto-melara-e-wass/ on Fri, 12 Nov 2021 11:27:57 +0000.