Fincantieri Buys Leonardo's Submarine Business for €415M

Italian shipbuilder Fincantieri announced on Thursday the acquisition of Leonardo's Underwater Armament Systems (UAS) for an enterprise value of €415 million.

The deal includes a fixed payment of €300 million, with an additional €115 million contingent on UAS's 2024 performance. Formerly known as Whitehead Alenia Sistemi Subacquei (WASS), UAS will be integrated into Fincantieri's submarine business.

Fincantieri will finance the acquisition through a capital increase of up to €500 million, split into two parts. Initially, subscribers to a €400 million capital increase will receive warrants for an additional €100 million tranche. Fincantieri's shares, valued at €1.15 billion, fell by 7.5% amid concerns over the size of the recapitalization required for the deal.

The excess capital raised could be used to expand Fincantieri's defense business. State lender Cassa Depositi e Prestiti (CDP) has committed to participating in the capital increase, although details were not disclosed.

The acquisition aligns with Fincantieri's strategy to bolster its defense sector, which now represents 25% of its revenues, and reinforces its presence in the subsea industry.

Leonardo's CEO Roberto Cingolani described the transaction as part of a broader effort to streamline the defense company's business portfolio.