Italian shipbuilder Fincantieri is in talks with Leonardo to buy the defence group’s submarine unit Whitehead Alenia Sistemi Subacquei (Wass), newspapers reported on Wednesday, sending Fincantieri’s shares up more than 7%.
The acquisition would have a value of between 200 million and 300 million euros ($217 million-$326 million), Corriere della Sera and financial daily Il Sole 24 Ore reported.
At the request of Italian market regulator Consob, Fincantieri issued a statement saying it would evaluate strategic opportunities that were in line with its latest business plan and created value for shareholders.
It made no direct reference to any specific deals.
A move by Fincantieri would be part of the group’s broader strategy to grow through acquisitions and focus more on the defence sector, which in its last results accounted for less that 25% of its revenues.
It would also strengthen its position in the underwater sector, which the group recently identified as a key area for growth.
The state-controlled shipbuilder is considering a capital increase of some 400 million euros to finance the deal, Il Messaggero said, adding the group was being advised by JPMorgan, Intesa Sanpaolo and Bnp Paribas on the matter.
A Leonardo spokesperson declined to comment on the reports.
Broker Banca Akros welcomed the potential deal as positive, saying it believed Wass could be valued at between 168 million and 225 million euros.
Fincantieri’s Milan-listed shares closed up more than 7% at 0.509 euros.
Milano Finanza first reported on Saturday that Fincantieri was considering a large acquisition and that it was examining either a recapitalisation or a convertible bond to do so.
Leonardo, also controlled by the Italian state, has been trying to find a buyer for Wass, which designs and builds underwater defence systems such as torpedoes and sonars, for years, but put a decision on hold after the war in Ukraine.
Source: Reuters.com