Italy’s Leonardo to buy 25% stake in German sensor maker Hensoldt

Reuters: Italian defense group Leonardo said on Saturday it agreed to buy a 25.1% stake in German military sensor maker Hensoldt from buyout firm KKR, for 23 euros per share in cash, or around 606 million euros ($733 million).

The deal comes just a month after the Italian state-controlled group halted a planned U.S. listing of its electronics unit DRS.

“We are excited about the investment in Hensoldt as the catalyst for the establishment of closer cooperation that will further enhance our respective positions in the growing defence electronics market,” CEO Alessandro Profumo said.

The two groups already cooperate in common programs including the Eurofighter Typhoon.

Leonardo will become Hensoldt’s largest investor alongside German state bank KfW, which bought a 25.1% stake in March.

The transaction is expected to be finalised in the second half of this year. Upon completion Leonardo will propose two candidates for Hensoldt’s supervisory board.

This week Hensoldt said KKR was soliciting bids for its 25.1% stake among major European defence contractors and that it was in advanced discussions with companies including Leonardo, France’s Thales, Spain’s Indra and Sweden’s Saab.

UBS and Deutsche Bank acted as Leonardo’s lead financial adviser and financial adviser, respectively, it said.