Fincantieri runs, rumours of Wass acquisition from Leonardo

(Il Sole 24 Ore Radiocor) - Purchases on Fincantieri, which is among the best stocks at Piazza Affari (FTSE MIB). Supporting the stock is the rumour that the company led by Pierroberto Folgiero is at an advanced stage of negotiations for the acquisition of the Wass business from Leonardo - Finmeccanica. The potential deal would not include Oto Melara, on which there had been rumours of interest from Fincantieri in the past.

Wass operates in the underwater defence industry producing torpedoes and sonars. Equita analysts point out that the interest in Wass had been known for some time and would be part of management's strategy to strengthen the defence business (which now accounts for around 40% of turnover). In detail, the transaction may be 'the trigger for the launch of an extraordinary operation to strengthen the financial structure'. Brokers estimate, even before the possible M&A transaction, a leverage of 6 times the 'Nd/Ebitda ratio at the end of 2023, which drops to about 4 times at the end of 2025 while still remaining at high levels'.

In this regard, there are other press rumours that Cdap (Fincantieri's shareholder with a 71.3% stake) may not follow the capital increase in full while retaining the majority in order to increase the free float. A final decision is expected between late April and early May. "For Leonardo," Equita continues, "Wass represents a small business unit within the defence division for which no updated numbers are available. Should the rumours be confirmed, we believe that the sale may make strategic sense pending an understanding of what the financial resources are for'.

According to Intermonte the acquisition would be consistent with Fincantieri's strategy to strengthen itself in the naval/military business and with the agreement between the two groups based essentially on the separation 'between the underwater domain and activities above sea level'. Moreover, they point out, the European defence plan announced yesterday provides limited funds and does not contain any particular novelties. However, the goal of increasing 'procurement towards European companies from the current 20 per cent to 50 per cent in 2030 is potentially worth over EUR 100 billion per year of increased spending towards European companies'.