Iveco holds thanks to the extra coupon after the sale of Defence to Leonardo

(Il Sole 24 Ore Radiocor) - In a day of declines on the shares of Piazza Affari (FTSE MIB ), Leonardo - Finmeccanica and Iveco Group manage to limit the damage, with the agreement for the sale of the Defence division under the lens. In detail, as anticipated in last week's business plan presentation, Leonardo has completed the purchase of Iveco's Defence business, with the Idv and Astra brands, for 1.6 billion. A price 'in line with the enterprise value set at 1.7 billion, net of agreed contractual adjustments'. The transaction, reads a note from the companies, 'will create a European champion in the land defence sector, with the size and skills required to compete globally'. It also strengthens Leonardo 'as a key player in the Land Defence sector' and makes it 'even more competitive in a market segment characterised by significant future growth prospects,' explained the group's CEO Roberto Cingolani.

For Equita, the aerospace group is expected to update guidance, including Iveco Defence, with the release of its accounts on 5 May. If the division were to be fully consolidated in the current year, analysts forecast turnover up 7% to EUR 22.4 billion and Ebitda at EUR 2.16 billion (+7%), with a margin of around 10%. "In case the plaintiff was sold to Rheinmetall - the sim points out, however - these effects would roughly halve". Equita, as well as Intermonte, then points the spotlight on the extraordinary dividend that 'materialises' for Iveco thanks to the net proceeds from the sale of the Defence Business. It is currently estimated at 5.7-5.8 euros per share (from the initial 5.5-6 euros) and payment is scheduled for 20 April. Overall, the transaction, according to Equita - which has reduced its target price to €19.98 -, "depending on the perimeter that will be defined, may have a positive impact on Iveco's low to mid single digit valuation". It will then have to wait for the outcome of the Tata Motors tender offer, which will close in June.