Safran Says they "Exercised their Golden Power" with Veto but Will Continue Pursuit

Italian officials refused a proposed Safran acquisition of a section of Collins Aerospace, with back channels citing concerns of contracts for domestic European military programs.

Safran announced the government veto on November 20th, putting off the acquisition of Microtecnica, the Italian subsidiary of Collins Aerospace (itself a Raytheon business). The decision was met with some surprise in Europe, given Italy's general disinterest in exercising such naked state power in the government sector. Italy, so goes the rumor, was not too keen on allowing Microtecnica to end up in French hands. Safran's statement referred to the move as Rome's "decision to exercise its Golden Power" in opposing the sale, a somewhat melodramatic but not wholly inaccurate characterization of the veto.

The firm in question, Microtecnica S.r.l., focuses on the production of flight control systems, a banner project being the Eurofighter program. The country's reliance on Microtecnica makes their ownership a prime concern given the breadth of Leonardo defense programs both within Italy and the greater region.

Safran seems insistent on pursuing the deal, publishing a statement saying that the company "remains committed to the transaction and is working with all parties to determine the appropriate next steps." The deal, they further note, remains "subject to notably obtaining other customary regulatory approvals and closing conditions.

FMI: www.safran-group.com