Fincantieri in talks to buy Leonardo’s torpedo business, source says

Tom Kington

Source Link

Italian shipyard Fincantieri is in talks with Italy’s Leonardo to buy the latter’s torpedo unit for €200-€300 million (U.S. $218-326 million), a source with knowledge of the negotiations told Defense News.

The move by Fincantieri reflects the state-controlled yard’s push to beef up its defense business, which currently accounts for 40% of overall revenue; the remainder comes from offshore and cruise ship work.

For more than a decade Leonardo has searched on and off for a buyer or partner for its torpedo unit known as WASS. The company’s primary focus is aircraft, helicopters and high-tech electronics.

A spokesperson for Fincantieri declined to comment for this story.

WASS, which stands for Whitehead Alenia Sistemi Subacquei, traces its origins to Englishman John Whitehead, who developed the world’s first effective self-propelled torpedo in 1875 in Fiume — then part of the Austro-Hungarian empire, and now in Croatia.

In 1995, WASS became part of the Italian group Finmeccanica, which has since been renamed Leonardo.

Fincantieri CEO Pierroberto Folgiero told Defense News in December he was keen on ramping up his firm’s undersea defense business, a sector the company predicts will be worth €94 billion between 2024 and 2030.

“We will be an integrator, deciding whether to make or buy systems,” Folgiero said at the time, adding that Fincantieri would also harness oil and gas technology for subsea defense needs.

As part of its ambitions, Fincantieri is a partner at a new subsea center in La Spezia, Italy, bringing together industry, the Italian Navy and academia to work on programs.

Fincantieri also signed a deal with Leonardo last year to work on drones to protect undersea cables and pipelines. And in December, Fincantieri purchased Italian firm Remazel, which manages subsea operations for the oil and gas sector.

The firm also signed a memorandum of understanding to work with W-Sense, an Italian startup using Norwegian technology to develop underwater communications based on acoustic and optical signals.

It also struck a deal to work with C.A.B.I. Cattaneo, an Italian supplier of underwater vehicles to Italy’s naval special forces. Last year, the Navy ordered a third U212 NFS submarine from Fincantieri.

On Thursday, Fincantieri released its results for 2023, which showed orders last year reached €6.6 billion, up from €5.3 billion the year before, while revenues rose 2.8% to €7.65 billion and are expected to reach €8 billion this year.

The firm reported a €53 million loss, against a €324 million loss in 2022.