Leonardo Set to Secure a Quarter Stake in HENSOLDT AG
Leonardo has entered into a binding agreement with Square Lux Holding II S.à r.l., a portfolio entity managed by funds advised by Kohlberg Kravis & Roberts & Co. L.P., to acquire a 25.1% share in HENSOLDT AG (“HENSOLDT”) for a monetary consideration of approximately € 606 million or € 23 per share. HENSOLDT stands as a prominent European entity in the domain of sensor solutions for defense and security applications, with a growing portfolio in cyber security, data management, and robotics. Following the stake acquisition, Leonardo will emerge as the principal shareholder of HENSOLDT alongside Kreditanstalt für Wiederaufbau (KfW), which is 80% owned by the Federal Republic of Germany. KfW consented to purchase a 25.1% stake in HENSOLDT back in March 2021.
Alessandro Profumo, Leonardo CEO, remarked: “We are thrilled about the investment in HENSOLDT as a catalyst for forging closer collaboration that will further strengthen our respective positions in the burgeoning defense electronics arena. We are confident that this initiative will generate value for all our stakeholders, as it consolidates complementary strengths to better serve customers and partners with the solutions they require, while safeguarding national technologies and competencies. This investment also underscores our long-standing belief in the necessity of fostering cooperation across the European aerospace and defense sector and highlights Leonardo’s commitment to play an influential role in this evolution.”
Thomas Müller, CEO of HENSOLDT, commented: “We warmly welcome LEONARDO’s investment in HENSOLDT. With this deal, we will gain a second long-term anchor shareholder and a robust potential strategic partner, with whom we are already collaborating successfully on multiple programs. As a leading supplier of sensor solutions for defense and security applications, we see numerous possibilities for collaboration with LEONARDO to further bolster our successful strategy and to strengthen HENSOLDT’s long-term development.”
Through the investment in HENSOLDT, Leonardo will establish a strategic long-term foothold in the rapidly expanding German defense market.
Currently, Leonardo and HENSOLDT maintain a strong relationship, including collaboration on the Eurofighter Typhoon project as independent operators within the consortium framework. The anticipated closer collaboration will hinge on a robust complementarity between the two firms in terms of geography, product range, end markets, clients, and suppliers across the Air, Land, and Naval sectors, enabling them to enhance access to their respective markets, provide comprehensive solutions to their clientele, and exchange best practices for developing future technologies.
Upon finalization of the transaction, Leonardo will propose two candidates to be appointed as members of HENSOLDT’s Supervisory Board.
Leonardo will uphold a robust capital framework through divestitures and DRS listings as well.
The conclusion of the transaction is contingent upon customary conditions, including regulatory approvals in Germany and several other nations, and is anticipated to occur in the latter half of 2021.
UBS and DB served as Lead Financial Advisor and Financial Advisor, respectively, to Leonardo. Clifford Chance acted as legal advisor to Leonardo.
