Leonardo Shares Rise After U.S. Arm Agrees to Merger With Israel’s RADA
2022.06.21 13:46
By Scott Kanowsky
Investing.com — Milan-listed shares in Leonardo S.p.A. (BIT:LDOF) rose by more than 5% on Tuesday, after the defense company said its U.S. subsidiary agreed to an all-stock merger with Israeli tactical radar maker RADA Electronic Industries Ltd (NASDAQ:RADA).
The deal will see Leonardo’s U.S. military electronics business – known as Leonardo DRS – acquire 100% of RADA. In exchange, RADA will take a 19.5% stake in Leonardo DRS.
Leonardo said the move will help bolster its defense solutions business by augmenting its product range and increasing its access to international markets.
“RADA is […] an excellent fit within Leonardo Group, as it provides an enhanced value proposition with its advanced tactical radars complementary to Leonardo’s sensor portfolio, enabling a stronger position and integrated approach in emerging sectors in the tactical operating environment,” the company added in a statement.
The Italian group said it expects the transaction to close in the fourth quarter, pending approval from RADA shareholders and regulators.
Leonardo DRS is then expected to be listed on both the NASDAQ and Tel Aviv stock exchanges under the ticker symbol “DRS”. Leonardo had previously postponed a listing on the New York Stock Exchange of a minority stake in DRS last year due to “adverse” market conditions.
Leonardo did not provide any further financial details about the deal.
