Italy Blocks Safran Purchase of Firm Involved in Making Eurofighters

Italy has thwarted a move by the French company Safran to acquire a vital Italian defense and aerospace firm, Microtecnica, raising concerns about the global conflict situation. The Italian government utilized its Golden Power legislation, a mechanism granting it authority to block acquisitions of strategic companies by foreign entities. Microtecnica, currently under the ownership of U.S.-based Collins Aerospace, is a component manufacturer for the Eurofighter jet, a key asset in Italy defense arsenal. Safran had intended to purchase Microtecnica as part of a $1.8 billion deal involving Collins Aerospace flight controls business, announced in July.

Unnamed sources within the Italian government informed Defense News that the decision to halt the sale was influenced by the prevailing global conflicts and political tensions. There were apprehensions about the security of the supply chain for crucial components needed by the Italian armed forces. The sources, speaking anonymously due to lack of authorization, indicated that the sale to Safran could pose a risk in this regard. Germany reportedly shared concerns with Italy about the potential impact on the Eurofighter, a collaborative aircraft project between the two nations.

Italy Golden Power legislation, introduced in 2012, is typically invoked to prevent Chinese takeovers of strategic firms. Notably, in 2021, Italian authorities raided a drone maker accused of being sold to China without proper notification to the government. A source familiar with the Golden Power law revealed to Defense News that it was uncommon for Italy not to establish conditions for the purchase under the legislation.

Safran CEO Olivier Andriès expressed surprise at Italy decision, suggesting that assumptions had been made about the company intentions. He emphasized Safran existing role as a supplier for the Eurofighter and various Italian defense programs through subsidiaries.

Despite Microtecnica already being owned by a U.S. firm, Collins Aerospace, Italy veto raises eyebrows, especially since the Golden Power law was not employed to set conditions facilitating the purchase. The decision appears unusual given that if Safran had acquired Microtecnica under Golden Power law conditions, it could have been blocked from reducing investments in the firm.

This development comes a month after the CEO of Italian defense company Leonardo, Roberto Cingolani, expressed a desire to foster more industrial alliances in Europe. He aimed to create entities transcending national boundaries and competing on equal terms with U.S. and Chinese giants. Italy Prime Minister Giorgia Meloni is expected to sign a defense sector cooperation deal with Germany during her upcoming visit to Berlin.