ROME (Reuters) -Italian shipbuilder Fincantieri said on Thursday it had bought Leonardo’s Underwater Armament Systems (UAS), in a deal giving the submarine business line an enterprise value of 415 million euros ($447.20 million).
The acquisition is comprised of a fixed 300 million euros, plus a maximum of 115 million linked to the 2024 performance of the UAS business, which was formerly known as Whitehead Alenia Sistemi Subacquei (WASS).
It will be financed through a capital hike of up to 500 million euros divided into two parts, Fincantieri said in a statement, confirming an earlier report by Reuters.
Subscribers to an initial capital increase of up to 400 million euros will be given warrants to exercise in a second tranche of up to 100 million euros.
Shares in the shipbuilder – which has a market capitalisation of 1.15 billion euros – closed down 7.5%, after falling more than 9%, with analysts concerned about the size of the proposed recapitalisation to fund the deal.
The additional funds beyond the value of the deal will be used by Fincantieri to further develop its defence business, a fast-growing sector which the state-controlled company is betting on, a source close to the matter told Reuters.
State lender Cassa Depositi e Prestiti (CDP) committed to subscribing to a part of the capital hike, Fincantieri said, without giving further details.
“The market worries about a recapitalisation that is worth more than the deal, and that there might be a liquidity issue (for Fincantieri),” a Milan-based trader told Reuters earlier on Thursday.
The acquisition fits with the company’s broader strategy to grow through acquisitions with an increasing focus on defence – now accounting for some 25% of its revenues – while strengthening its position in the subsea business.
Fincantieri’s Chief Executive Pierroberto Folgiero said the deal was “a crucial milestone” for the group which underpinned its planned industrial focus.
In a separate statement Leonardo Chief Executive Roberto Cingolani said the deal was part of a plan to rationalise the defence company’s business portfolio.
($1 = 0.9280 euros)
(additional reporting by Claudia Cristoferi, editing by Keith Weir and Gavin Jones)
