What will Leonardo do on Drs, Hensoldt, Oto Melara, Wass and more
From the IPO of Drs to the finalization of the purchase of Hensoldt, to the sale of Oto Melara and Wass, here are all the open files of Leonardo
From the IPO of Leonardo Drs to the finalization of the purchase of Hensoldt, to the sale of the Oto Melara and Wass units, today the Defense Systems division.
These are the open dossiers of the Italian defense and aerospace giant, which on 4 November presented the results of the group's first 9 months of the year .
All the details on the ongoing maneuvers of the Leonardo group, led by Alessandro Profumo.
TO LEONARDO: "DRS IS PERFOMING WELL"
"Drs continues to perform incredibly well, we continue to monitor the conditions of the financial markets but strategically there are no changes, the US market continues to be strategic". This was stated by CEO Profumo, responding to the IPO issue of the US subsidiary Drs during the 9-month conference call with analysts.
The IPO project suspended in March envisaged the placement of 22-25% of Drs for a total income between 730 and 800 million for the parent company which would have kept between 75% and 78% of the American group in the defense sector.
“Strategically, there are no changes on the outlook. For us, the US is an important market and Drs is performing very well ”, Profumo reiterated.
THE RESULTS OF LEONARDO DRS
“The nine months of 2021 are characterized by excellent commercial performance in all the Electronics business areas both in the European component and in Leonardo Drs,” reports the note from the group.
Revenues for the US subsidiary of Leonardo that works for the Pentagon are good: they are on the rise excluding the unfavorable effect of the USD / € exchange rate. Yet, Drs recorded a drop in orders in the 9 months of 2021 of 29.1% compared to the same period in 2020.
THE LATEST CONTRACT FROM THE US AIR FORCE
However, at the end of October, Drs announced the award of a contract from the US Air Force for the supply of electronic warfare systems. “The contract is worth $ 950 million and will be spread over 5 years (approximately 7% of annual turnover). In 2020, Drs reported order intake of 3.1 billion (1.43 billion in the first half of this year). The contract represents 6% of Leonardo's estimated orders for 2021 (14 billion) ”recalled MF .
WHAT STATE IS THE IPO AT?
In early October, Reuters revealed that the Piazza Monte Grappa company planned to list its subsidiary Drs on Wall Street in the fall. The Italian aerospace and defense giant would sell about 20% of DRS, which has the United States Pentagon among its main customers.
SLIDE AGAIN
But the listing will not take place either in the autumn, much less by the end of the year.
“An IPO will be re-evaluated when market conditions are favorable and it will be possible to obtain a successful IPO with an appropriate valuation,” reports the Piazza Monte Grappa company in the note on the results of the third quarter.
"The next window for the listing would be in the first months of next year, according to authoritative sources" reports Gianni Dragoni in Il Sole 24 Ore .
THE CLOSING OF THE ACQUISITION OF THE GERMAN HENSOLDT
In the meantime, the closing of the acquisition of the German Hensoldt could also be postponed.
On April 24th Leonardo signed an agreement with Square Lux Holding II S.à rl, a company controlled by Kkr , for the acquisition of a 25.1% stake in Hensoldt AG. As the note from the group recalls "the company is a leader in Germany in the field of sensors for defense and security applications, as confirmed by the recent important contracts acquired (eg EFA, Pegasus), and already had a consolidated collaboration relationship with Leonardo in important programs such as Efa, Male, Iff. The finalization of the transaction is subject to the usual approvals by the competent authorities and is expected in the last quarter of 2021 and will involve an outlay of approximately € mil. 606 or € 23 per share ".
However, according to Il Sole 24 ore “even the finalization of the 25.1% purchase of the German Hensoldt could be postponed to 2022. The group is evaluating other strategic options”.
THE TRANSFER OF OTO MELARA AND WASS
Finally, the Oto Melara and Wass dossier also remains at stake.
According to press sources this summer, Fincantieri would be in negotiations for the purchase of Oto Melara , the La Spezia company of light and heavy weapons merged into the Defense Systems Division, within the Electronics, Defense and Security Systems sector of Leonardo from 1 January 2016. The indiscretion, anticipated by the 19th century, is not commented on by Fincantieri.
But the game for the acquisition of Leonardo's Defense Systems division crosses national borders.
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.
The news was reported on Friday by Repubblica 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.
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 .
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 1,500 direct and indirect workers.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/che-cosa-fara-leonardo-su-drs-hensoldt-oto-melara-wass-e-non-solo/ on Sun, 14 Nov 2021 14:24:35 +0000.