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Leonardo (Baa3/BBB-): M&A Activity Reported

CAPITAL GOODS
  • Il Sole 24 Ore reports Iveco Defence Vehicles (IDV) could be a target for Leonardo.
  • Iveco does not split out financials for the division, but specialty (firefighting plus IDV) represents 2.5% of unit volume. Clearly IDV units represent higher value than average. The geographic footprint also suggest that this is a small unit.
  • This looks like a logical divestment for Iveco, a very different product line from their core commercial vehicle expertise.
  • Earlier this week it was reported that Leonardo is in talks to sell its Wass unit.
  • It seems evident that Leonardo is optimising its asset portfolio. For now we see little credit impact.

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