Italy Blocks Safran’s Acquisition of Collins Aerospace’s Flight Control Systems Arm

Concerns over Eurofighter program and supplies to armed forces lead to veto

Italy has rejected French group Safran’s planned $1.8 billion purchase of the flight control systems arm of Collins Aerospace, citing concerns over supplies to armed forces and contracts for the Eurofighter program. This rare move against a European Union company has raised eyebrows and sparked discussions between Italy, Germany, and France. Safran, whose largest shareholder is the French government, expressed its commitment to the deal but is now working with all parties to determine the next steps.

Lack of Guarantees on Production Lines in Italy and Eurofighter Concerns

According to Italian government sources, Safran failed to provide sufficient guarantees that it would preserve production lines in Italy, which raised concerns about potential disruptions to supplies for the Eurofighter and Tornado jet fighter programs. Italy had even consulted with the German government, highlighting the risks associated with the deal. The lack of discussions between European partner countries has been deemed “regrettable” by a French finance ministry website source.

Unforeseen Decision Surprises Safran

Safran Chief Executive Olivier Andries expressed surprise at Italy’s decision, stating that the company had not held discussions with the Italian or German governments. He emphasized that Safran is already a supplier for the Eurofighter and other Italian defense programs through various subsidiaries. Despite this, the Italian government assumed the worst about Safran’s intentions, leading to the veto.

The Impact on Eurofighter and Defense Cooperation

The Eurofighter, a European consortium composed of Airbus, BAE Systems, and Leonardo, competes with the French-built Dassault Rafale for export orders. The Italian veto raises questions about the future of defense cooperation between Italy and Germany, as Giorgia Meloni, the leader of Italy’s government, is set to travel to Berlin to seal a cooperation deal. Economy Minister Giancarlo Giorgetti is also scheduled to hold talks with French counterpart Bruno Le Maire to address the situation.

Italy’s Rare Use of “Golden Powers”

Italy’s decision to block Safran’s acquisition is a departure from its typical use of “golden powers” to veto acquisitions by Chinese and Russian companies. This case is particularly interesting as it involves a veto against a buyer from an EU and NATO country. Francesco Galietti, the founder of political risk firm Policy Sonar, highlights the significance of this move.

Conclusion:

Italy’s veto of Safran’s acquisition of Collins Aerospace’s flight control systems arm has raised concerns about defense cooperation and the Eurofighter program. The lack of guarantees on production lines in Italy and fears of disruptions to supplies for the Eurofighter and Tornado jet fighter programs were cited as reasons for the veto. The decision has surprised Safran, which is already a supplier for the Eurofighter and other Italian defense programs. The impact on defense cooperation between Italy, Germany, and France remains uncertain. Italy’s rare use of “golden powers” to block acquisitions from EU and NATO countries adds another layer of complexity to this case.