Safran has been informed of the Italian government’s decision to oppose the sale of Collins Aerospace’s actuation and flight control business to the French company.
Under the so-called ‘Golden Power’ foreign direct investments regime, the Italian government has the power to limit or prevent foreign direct investments and corporate transactions involving sovereign assets it perceives may threaten national economic security.
“This decision came as a surprise,” a spokesperson from Safran explained to Airline Economics, referencing the French’s company’s “existing successful and long term business relationship with all Italian aerospace and defense players” including Leonardo, Avio and Agusta.
Clarifying the involvement of Turin-based Microtecnica, the Italian asset of Collins Aerospace’s actuation and flight control business (which concerns three facilities), the spokesperson added: “There is no specific and critical technology developed by Microtecnica within the Collin’s portfolio we are contemplating.” The Microtecnia element remains accountable for around 15% of the revenue of the entire proposed acquisition.
‘Safran remains committed to the transaction and is working with all parties to determine the appropriate next steps,’ noted the company in a statement. “We are studying all consequences and [have] opened options with our counsels and the seller,” concluded the Safran spokesperson.
The planned acquisition, announced by Safran in July, is worth an estimated $1.8 billion. Safran’s chief executive officer Olivier Andries confirmed that the deal would allow the French engine and aircraft equipment maker to “optimize resources” as it looks to focus more on the rapidly expanding area of electrical actuation and flight control solutions.
Update 23 November: Speaking at a press conference ahead of a meeting in Berlin, Italian Prime Minister Giorgia Meloni confirmed that the deal had been vetoed owing to concerns about the ongoing availability of components to national armed forces. In a decision designed to mitigate “potential interruptions of [the] logistics chain” (potentially affecting the Eurofighter and Tornado fighter jets), Meloni confirmed that Italy would have “opportunities … to explains to its allies the reasons for this measure”.