Italy’s Leonardo is set to buy a 25.1 percent stake in German sensor company Hensoldt for 606 million euros ($730 million), the company announced.
By acquiring the stake from U.S. investment fund KKR, Leonardo will share the spot of largest shareholder in the company with German state-run bank Kreditanstalt für Wiederaufbau (KfW).
This acquisition unites two firms that have worked on the Eurofighter program and bolsters European consolidation in the defense electronics sector.
Alessandro Profumo, CEO at Leonardo said the deal would cause a fusion of the firms’ “complementary strengths,” while “preserving national technologies and capabilities.”
“This investment reflects our long-held view on the importance of building cooperation across the European aerospace and defense industry,” he added. Upon completing the deal, which values Hensoldt at 23 euros a share, Leonardo will propose two new members to join the German firm’s board.
Stefania Pucciarelli, Italy’s junior defense minister, said the deal which she referred to as “excellent” demonstrated Italy’s determination to compete globally in the defense-electronics sector, while also reinforcing Leonardo’s stance in the German market. Leonardo said it plans to “maintain a solid capital structure” after the purchase through sell-offs and the listing of its U.S. unit DRS.
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