ROME — Italian defense giant Leonardo has agreed to buy Italy’s Iveco Defence Vehicles for €1.7 billion ($1.9 billion), ending months of speculation about the future of the up-for-sale military vehicle maker.
The deal, which Leonardo will finance with available cash resources, marks another step into land systems for Leonardo after its tie-up last year to build tanks and fighting vehicles with Germany’s Rheinmetall.
It also keeps IDV Italian after domestic politicians expressed concerns over a long list of foreign suitors keen on buying the firm.
“This transaction reinforces Leonardo’s position as a reference player in the European land defense market, a segment expected to experience sustained growth in the coming years”, said Leonardo CEO Roberto Cingolani, after the deal was announced.
Leonardo said the deal would facilitate the greater integration of its electronics and turrets on IDV vehicles, which count the Italian army and Brazilian military as major customers.
After the deal was signed, Cingolani told analysts that Leonardo had initially planned to buy IDV jointly with Rheinmetall, but then decided to go it alone. It was, he said, a “simpler and more convenient” solution.
Rheinmetall said it was however in exclusive talks with Leonardo to split off and buy IDV’s military trucks operation.
With 2,000 staff, IDV saw revenue rise 15% last year to €1.13 billion as the Ukraine war has fueled demand for armored vehicles.
It was sold by the Exor Group, which is the largest shareholder in car maker Stellantis and controlled by the Italian Agnelli family.
Others bidders for IDV reportedly included Spains Indra and Franco-German consortium KNDS.
Leonardo and Rheinmetall are currently planning to build 1,050 new infantry fighting vehicles for the Italian army based on the Rheinmetall Lynx, and 132 tanks based on Rheinmetall’s under-development Panther KF51.
IDV already has a piece of the Italian vehicle order. In December it said it had signed a deal with Leonardo to take 12-15% of the development and production work on the deal, which has been valued at €23 billion.
Leonardo and IDV already have a joint venture in place, CIO, which builds VBM wheeled fighting vehicles and wheeled Centauro tanks for the Italian army.
Tom Kington is the Italy correspondent for Defense News.