Leonardo acquires a 25,1% stake in Germany's leading defense electronics company from KKR

(To Leonardo)

Leonardo entered into an agreement with Square Lux Holding II S.à rl, a company controlled by funds assisted by Kohlberg Kravis & Roberts & Co. LP, for the acquisition of a 25,1% stake in HENSOLDT AG ("HENSOLDT") at the price of approx. € 606 million or € 23 per share. HENSOLDT is Germany's leading company in the field of sensors for defense and security applications, with an ever-expanding portfolio in cyber security, data management and robotics. Following the finalization of the transaction, Leonardo will become the major shareholder of HENSOLDT together with Kreditanstalt für Wiederaufbau (KfW), 80% owned by the Federal Republic of Germany. KfW agreed to acquire a 25,1% stake in HENSOLDT in March 2021.

"We are excited about the investment in HENSOLDT as a catalyst for creating a closer partnership that will further strengthen their respective positions in the expected growing defense electronics market. We believe this step will create value for our shareholders by bringing together points of complementary strengths to serve more customers and partners with the solutions they need, while preserving national technologies and capabilities. This investment also reflects the long-term vision regarding the importance of building cooperation in the European aerospace and defense industry and Leonardo's determination to have an active role in its development ”commented Alessandro Profumo, CEO of Leonardo.

Thomas Müller, Chief Executive Officer of HENSOLDT, said: "We welcome Leonardo's investment in HENSOLDT. Through this transaction we will be able to count on a second long-term reference shareholder in our company and a potential important strategic partner with whom we already work. successfully across a number of programs. As a leader in the supply of sensors for defense and security applications, we see multiple opportunities for collaboration with Leonardo to further support our successful strategy and strengthen HENSOLDT's long-term growth. "

Through the investment in HENSOLDT, Leonardo will establish a long-term strategic presence in the rapidly growing German defense market.

Already today, Leonardo and HENSOLDT have an established partnership that includes collaboration on the Eurofighter Typhoon program as independent operators within the consortium. The closer cooperation will be based on a strong complementarity of the two companies in terms of geography, product portfolio, markets, customers and suppliers in the Air, Terrestrial and Naval domains and will allow to strengthen access to their respective markets, offer complete solutions to its customers. and share best practices for developing future technologies.

Upon completion of the transaction, Leonardo will propose two candidates to be appointed as members of the Supervisory Body of HENSOLDT.

Leonardo will maintain a solid financial structure also through the sale and listing of Leonardo DRS.

Finalization of the transaction, expected in the second half of 2021, is subject to customary conditions, including regulatory clearances in Germany and a select number of countries.

UBS and DB acted respectively as lead financial advisor and financial advisor to Leonardo. Clifford Chance acted as Leonardo's legal advisor.