ROME — A decision on the sale of a stake in Italian cannon maker Oto Melara will not be made before September in order to give Italy’s Fincantieri time to mull an offer, a government official has told Defense News.
Owned by Italy’s state-controlled defense giant Leonardo, Oto Melara has been the subject of takeover talks since last year, as it no longer fits with Leonardo’s focus on electronics, cyber and aviation.
At the end of May, Germany’s Rheinmetall made a non-binding offer to buy 49 percent of the firm for 190 million to 210 million euros ($204m-$226m), with the offer of involving Oto Melara in work on its Lynx fighting vehicle should Italy choose to buy it.
Rheinmetall has not had access to the Oto Melara data room so its offer could yet change.
Leonardo has previously held talks about a full sale of the firm to KNDS – the alliance of Germany’s Krauss-Maffei Wegmann and France’s Nexter.
Leonardo CEO Alessandro Profumo has called a deal KNDS the “ideal” solution for Oto Melara, although the Italian government will have a say in the choice.
Italian state-controlled shipyard Fincantieri has also expressed an interest in the firm, which supplies naval as well as land cannons.
“We will wait for September for a Fincantieri offer, we want to have the entire picture,” the government source said. A new Fincantieri CEO, Pierroberto Folgiero, was appointed this spring following the government’s decision to substitute longtime CEO Giuseppe Bono.
The source did not rule out an acceptance of the Rheinmetall offer to take 49 percent of Oto Melara with Leonardo’s 51 percent remaining stake being sold to Fincantieri, meaning control of the firm would remain in Italy.
That is a solution favored by Italian union UILM, which is pushing the Italian state to retain a controlling interest in the firm.
In a statement on June 1 after news broke of the Rheinmetall offer UILM said, “We will not accept proposals which do not involve Italian governance.”
Tom Kington is the Italy correspondent for Defense News.