Finmeccanica, €8 billion order

Rome - Twenty-eight Italian fighter planes to strengthen Kuwait’s defences against ISIS militias. That is also the purpose of the huge order that Finmeccanica-Alenia Aermacchi has won to provide the Kuwaiti government with 28 Eurofighters. In fact, since 2003, Italy and the Gulf States have been linked by a defence cooperation agreement. For this special provision, Finmeccanica, through Alenia Aermacchi, will be the lead company in the European Eurofighter consortium, which will have positive effects on Italian companies in the defence sector.

According to some analysts, the figure for the order awarded to Alenia is €1.5-2 billion. It is a figure that will have quite a significant impact on the group’s earnings. Other leaks speak of a €3-4 billion commission for the aircraft and another €3-4 billion for training, logistics and spare parts. The agreement, which at times seemed to have failed, should be finalized shortly, although Finmeccanica has not yet received confirmation. The negotiations have been moving forward for over a year and the Italian government is closely following developments (it is a major shareholder in Finmeccanica) through Minister of Defence Roberta Pinotti, as, of course, is the group’s chief, Mauro Moretti.

Since early yesterday morning, Finmeccanica’s stock has begun to best the performance of Milan stock exchange, and with an increasing number of leaks it began to fly high, closing at €12.47 (+5.41%). The fact that Finmeccanica-Alenia Aermacchi is the leading company in the Eurofighter consortium for this provision means that the aircraft will be produced in Italy, and that Italian companies, both those that are part of Finmeccanica and others, will be awarded the majority of the contracts.

According to the information that is available as of now, the provision calls for 22 two-seat aircraft and 6 single-seat aircraft. Besides Finmeccanica - with its subsidiaries Alenia Aermacchi, Selex ES (radar, avionics systems and electronic warfare apparatus) and MBDA (missiles) in which it owns a stake - the commission also involves Elettronica, Aerea, Vitrociset and various other small and medium-sized Italian companies. The Eurofighter consortium, which has its main office in Munich, has four countries as its shareholders: Germany (33%) through EADS Germany, the United Kingdom (33%) through BAE Systems, Italy (21%) through Alenia-Aermacchi and Spain (13%) through EADS Spain.