At the Leonardo Half Year results press conference Roberto Cingolani, the company CEO, officialised a rumour that has been around for some days, the acquisition of IDV by the main Italian defence group
“Two years ago there was a possibility we explored to create a joint initiative with Iveco, but recently there was a strong acceleration,” the Leonardo CEO said while introducing the IDV acquisition subject. “Land has become strategic over the last 12 months, due to the increasing demand of land vehicles, the market being estimated at approximately 100 billion by 2030. Even more important is that defence investment is targeting around 40% of the funding for land assets, and 70% considering land and air assets, which perfectly fits our multi-domain interoperability vision now,” he underlined.
Europe needs to protect its long borders, and to do that it must increase its land and air capabilities. This led to the creation of the LRMV joint venture with Rheinmetall to produce the new Main Battle Tank and the new tracked Infantry Fighting Vehicle for the Italian Army, with hopefully some export contract adding to the national numbers. The workshare between the Italian and the German groups on the Italian Army contract included a 15% earmarked to IDV, through the Iveco-Oto Melara Consortium (CIO). “Now all the Italian share will become entirely Leonardo,” he continued. Underlining the strategic importance of the collaboration with Rheinmetall, due to the latter world-class expertise on land defence systems as well as on trucks, he pointed out that also IDV is involved in military trucks through Astra, however how much this will bring to further consolidations is definitely too early to be said.
Looking at the impact of the IDV business acquisition, this will be a production capacity boost considering its three facilities in Italy, Bolzano, Vittorio Veneto and Piacenza, as well as the trucks plant in Ulm, Germany, and the one in Sete Lagoas, Brazil. “Not only, IDV started studying land unmanned system, and that would complete our multi-domain interoperability strategy which adopts drones at sea, on land, and in the air,” Cingolani said. “The acquisition of IDV further reinforces Leonardo strategy positioning in the land domain, and this is something really new because we have to be fast in intercepting the new market demand and the change in the global security landscape,” he added.
Coming to financial figures, the Leonardo CEO underlined the 2024 results of IDV, EUR 1.133 million revenue, EUR 129 million Adjusted EBIT DA, an 11.4% margin, and EUR 108 million Adjusted EBIT, a 9.5% margin. The four production sites employ overall 2,000 people, of which around 250 are R&D engineers. The revenue is balanced between armoured vehicles (47%) and trucks (53%), 47% of the market being in Europe, excluding Italy, which accounts for 25%, the remaining being split between North America (12%), South America (7%) and Rest of the World (9%). IDV has nine commercial offices across Europe, the US and Brazil, and six R&D centres in Italy, Brazil, the UK and Germany.
“It is very encouraging that there is a German-Italian connection among the plants which mirrors our joint venture with Rheinmetall,” Cingolani said. Considering the different categories of products from IDV, the heavy armoured wheeled vehicles and the production of subsystems for tracked vehicles accounted in 2024 for 24% of the revenues, while light armoured vehicles represented 23%, the UGV being scheduled to start in 2026, being therefore unaccounted. Military trucks and commercial militarised trucks and vehicles made up 42% of the revenues, the last 11% coming from heavy trucks and special vehicles used in mining, oil and gas, and construction.
“It is a very interesting portfolio, and we have been working on the synergies. The enterprise value has been estimated to be 1.7 billion which is a fair price. We are going to go immediately for the acquisition, we have a term sheet already signed with our partners in Rheinmetall because we will discuss over the next few months how to distribute the truck activity and the armoured vehicle activity. This will be done over the next few months and should be completed by year end. Rheinmetall has a considerable experience in the field of military trucks, and this will be of big help for us because the JV with Rheinmetall gets stronger. We have already started estimating the synergies with Rheinmetall that of course were not included in our acquisition evaluation, We must consider that we will become the first integrated OEM that can offer wheeled and tracked systems with a full value proposition, and we will benefit of an expanded commercial network as we will absorb the IDV one, which will make us very strong.” All this will have a considerable influence under many aspects, not last that of production capacity, also thanks to the increased number of engineers, the expansion of the logistic network being another benefit.
According to Leonardo the acquisition will be finalised with internal funds, the positive trend seen in the first half year allowing to forecast improved performances compared to the original guidance for the current year.