The Italian government has vetoed France's Safran SA's takeover of an Italian aerospace business, citing concerns about the efficiency and security of the country's armed forces. Italian Prime Minister Giorgia Meloni stated that the decision to exercise the government's "golden power" was driven by the need to protect the readiness of their armed forces and ensure the integrity of the logistics chain. She further emphasized the importance of avoiding any potential disruptions in supplies that could impact national security.
The move to block the sale of the subsidiary, Microtecnica Srl, which is part of a larger transaction, surprised Safran CEO Olivier Andries. However, Meloni stressed that the Italian government would have ample opportunities to discuss the reasons behind this decision with its international partners, primarily centered around issues related to efficiency and security.
During a joint press conference held in Berlin with German Chancellor Olaf Scholz, Meloni's concerns were echoed. Scholz refrained from explicitly endorsing Italy's position but emphasized the spirit of collaboration and friendship within Europe. He stated that all European countries work closely together and are committed to further development.
Safran had agreed in July to acquire an aerospace business from Raytheon Technologies Corp., now known as RTX, for an enterprise value of $1.8 billion. The purchase aimed to expand Safran's flight-control and actuation activities, along with integrating 3,700 employees from the acquired company. As a major supplier to both the Eurofighter combat jet and the competing Rafale model, Safran's products are crucial to the defense industry.
Italy's exercise of the "golden power" rights is not an isolated incident. In June, the country took similar measures to limit China's Sinochem's influence over Formula One supplier Pirelli SpA, citing concerns about data privacy and security. These actions highlight the Italian government's commitment to safeguarding national interests and maintaining control over strategically significant industries.
The decision to block Safran's takeover reflects Italy's dedication to preserving the efficiency and security of its armed forces. With the potential for disruptions in the logistics chain and concerns about supply interruptions, the government has chosen to exercise its regulatory power. This move emphasizes Italy's commitment to protecting national security and maintaining control over key industries that are vital to defense and strategic interests.