Italian shipbuilding giant Fincantieri is set to acquire the Underwater Armament Systems (UAS) business from defense counterpart Leonardo in a pivotal deal that could ascend to a valuation of €415 million ($447 million). This strategic maneuver is not only poised to bolster Fincantieri’s torpedo production capabilities but also positions the firm at the forefront of underwater acoustic technologies—a move deemed integral to its growth trajectory in the burgeoning underwater sector.
The transaction, earmarked for completion in early 2025, involves Fincantieri disbursing a fixed sum of €300 million ($323 million) with an additional contingent payout of up to €115 million ($124 million), tethered to the UAS division’s performance in 2024. Notably, this acquisition is in harmony with Fincantieri’s overarching strategy to cement itself as a dominant force in naval defense—a sector where it already enjoys a commanding market share exceeding 40 percent, with operational shipyards spanning four continents.
UAS, previously known as Whitehead Alenia Sistemi Subacquei (WASS), is a storied establishment with a pedigree in the development of underwater weaponry, including torpedoes, countermeasures, and sonar systems. In the preceding fiscal cycle, UAS accrued revenues of €160 million ($172 million). Moreover, this unit holds a 50% stake in the GEIE EuroTorp consortium, sharing the stage with renowned defense corporations Naval Group and Thales, with a focus on the MU90 light torpedo—a testament to the division’s collaborative prowess and industry standing.
Fincantieri’s CEO, Pierroberto Folgiero, has underscored the undersea domain’s strategic significance, likening the current state of undersea defense and commercial markets to the nascent stage of space technologies four decades prior. Folgiero has illuminated the market’s vast potential, estimating it could burgeon to a $400 billion valuation by 2030. In alignment with this vision, Fincantieri has inked a Memorandum of Understanding with WSense, a Rome-based enterprise, to probe the Underwater Internet of Things (UIoT) landscape—further evidence of Fincantieri’s commitment to innovation and growth in this domain.
Meanwhile, Leonardo’s divestiture of the UAS division aligns with its strategy to streamline its business portfolio, sharpening focus on its core competencies in aircraft, helicopters, and electronics. The sale also accentuates the symbiotic alliance between Leonardo and Fincantieri, fostering an ecosystem aimed at heightening defense capabilities and global competitiveness.
Fincantieri, which is already entrenched in building submarines for the Italian Navy, envisages the establishment of the National Subsea Dimension Pole (PNAS)—a strategic fulcrum to synergize public and private stakeholders within the underwater sector. This aspiration is geared towards positioning Fincantieri as a ‘natural leader’ in this specialized arena, strengthening Italy’s naval fortitude and industrial dexterity.
Relevant articles:
– Fincantieri acquires Leonardo’s undersea armaments business worth up to $447 million, Breaking Defense, 05/11/2024
– Fincantieri Acquires Leonardo’s ‘Underwater Armaments Systems’ Business, Naval News, 05/10/2024
– Fincantieri acquires Leonardo’s Underwater Armaments Systems business, European Security & Defence, 05/10/2024
– Fincantieri to acquire UAS, Leonardo’s torpedo and sonar production line, Naval Technology, 05/10/2024
– Fincantieri buys Leonardo’s torpedo unit in deal that could reach $446M, Defense News, 05/09/2024