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Finmeccanica 

“Market Cap $5.78 B As of May 2014

At a Glance

  • Industry: Aerospace & Defense
  • Founded: 1897
  • Country: Italy
  • CEO: Alessandro Pansa
  • Website: www.finmeccanica.com
  • Employees: 63,835
  • Sales: $20.75 B
  • Headquarters: Rome

Forbes Lists

#985 Global 2000

  • #455 in Sales
  • #584 in Assets
  • #1747 in Market value
Profile

Finmeccanica SpA engages in the aerospace and defence sector. The company operates through the following business segments: Helicopters, Defence and Security Electronics, Aeronautics, Space, Defence Systems, Transportation, and Other Activities. The Helicopters segment design and development of helicopters and tilt rotors for civil and military use. The Defence and Security Electronics develops, manufactures, and supports systems for mission critical, military sustainment requirements, and homeland security. The Aeronautics segment manufactures state of the art complete tactical airlifters, combat aircraft and unmanned air vehicles for both civil and military applications. The Space segment produces satellite systems for navigation, telecommunications, meteorology, environmental monitoring, defence, scientific missions, and earth observation. The Defence Systems segment designs, develops and produces missile systems, torpedoes, naval artillery and armored vehicles. The Transportation segment provides rolling stock, transport solutions and railway signaling systems. The Other Activities segment includes financial support, real estate holdings, machinery and plants for processing aluminum and steel products, contracting services for electricity generation, and primary aluminum production. Finmeccanica was founded on March 18, 1948 and is headquartered in Rome, Italy.

“Finmeccanica History

From 1960s to 1980s Italy’s defence and aerospace industry was split in different state-holding entities: so Efim owned the helicopters manufacturer Agusta, the defence company Oto Melara and the electronic enterprise Officine Galileo whereas STET(another IRI subsidiary) held Selenia, Elsag and SGS Thomson, all electronic enterprises with specializations in security and defense. In 1989 an internal IRI reorganization process brought STET electronic enterprises to Finmeccanica, that from Aeritalia-Selenia merger made up its aerospace subsidiary Alenia. In 1992 Efim wound up because of troubled financial situation; so Agusta, Oto Melara, Officine Galileo and Breda passed to Finmeccanica, which became one of the most important Italian industrial groups. Finmeccanica, which was previously fully state owned by IRI, went under a privatization process in 1993, when it was listed in Milan Borsa Italiana.The company was established in 1948 as a subholding for mechanical industry of state owned IRI. Finmeccanica has held for years some historic Italian enterprises, as Alfa Romeo, Aeritalia and Ansaldo; Finmeccanica presence in aerospace field was restricted to Aeritalia, the biggest airplane manufacturer of Italy.

In 1992 Finmeccanica’s Agusta became a 32% partner in NHIndustries, the prime contractor for NH90 helicopter, along with Eurocopter (62.5%) and Fokker (5.5%). In July 2000 Finmeccanica and the British GKN plc agreed to merge their respective helicopter subsidiaries (Agusta and GKN-Westland Helicopters) to form AgustaWestland. On May 26, 2004 GKN confirmed that it would sell its share to Finmeccanica for £1.06 billion.

In December 2001 the missile business of Alenia Marconi Systems (AMS), a joint Finmeccanica/BAE Systems company, was merged with other European missile manufacturers to form MBDA which thus became the world’s second largest missile manufacturer.

In July 2003 Finmeccanica and BAE Systems announced their intention to set up three joint venture companies, to be collectively known as Eurosystems. These companies would have pooled the avionics, C4ISTAR and communications businesses of the two companies. However the difficulties of integrating the companies in this way led to a re-evaluation of the proposal; BAE’s 2004 Annual Report states that “recognizing the complexity of the earlier proposed Eurosystems transaction with Finmeccanica we have moved to a simpler model”. The main part of this deal was the dissolution of AMS and the establishment of SELEX Sensors and Airborne Systems. In late March 2007 BAE Systems sold its 25% share of SELEX Sensors and Airborne Systems to Finmeccanica for €400 million (approx. £270 million c. 2007). Following a merger with Galileo Avionica S.p.A. (another Finmeccanica company) in January 2008, SELEX S&AS became SELEX Galileo. In January 2013 the company merged with Finmeccanica’s other Defence Electronics companies, SELEX Elsag and SELEX Sistemi Integrati to become Selex ES.

In May 2008 Finmeccanica announced its intention to purchase the U.S. defense contractor DRS Technologies for nearly $5.2 billion. On October 22, 2008, the sale of DRS Technologies was finalized.

In 2011 the company faced accusations that it had created slush funds with which to bribe politicians and chairman Pier Francesco Guarguaglini came under investigation. He denied any wrongdoing but, following pressure from Prime Minister Mario Monti, he stepped down from his post on 1 December receiving a golden handshake of 4 million Euros.

According to Finmeccanica emails published in the Syria Files release by WikiLeaks on 5 July 2012, Finmeccanica increased its sale of mobile communications equipment to Syrian authorities during 2011, delivering 500 of these to the Damascus suburb Muadamia in May 2011, after the Syrian uprising had started, and sending engineers to Damascus in February 2012 to provide training in using the communications equipment in helicopter terminals, while the uprising continued. Finmeccanica stated that the equipment sales were legal, they occurred “before the outbreak of conflict inside Syria”, and the equipment “was designed for use by emergency responders” for civilian use only.

It was reported on 12 February 2013 that the chief executive, Giuseppe Orsi, was arrested on corruption charges. Prosecutors allege he paid bribes to ensure the sale of 12 helicopters to the Indian government, when he was head of the group’s AgustaWestland unit.

On 13 February 2013 Finmeccanica’s Board of Directors named Mr Alessandro Pansa chief executive officer and resolves to confer the role of vice chairman to Admiral Guido Venturoni.

Shortly after Pansa’s appointment, Italian investigators discovered a case of bribery by Finmeccanica in its deal with India following which the government of India issued a show cause notice to the company.

In July 2013, Finmeccanica shareholders approved Giovanni De Gennaro, Italy’s former police chief, as chairman of the group.

In October that year, Finmeccanica reached a deal to sell a majority stake in power engineering company Ansaldo Energia to state lender Cassa Depositi e Prestiti and in December the Group announced the closing of the sale to Fondo Strategico Italiano (held by Cassa Depositi e Prestiti).

On May 15th 2014, Finmeccanica shareholders’ meeting proceeded to appoint the Company’s new Board of Directors, that will be in office from 2014 to 2016. Giovanni De Gennaro was confirmed as Chairman of the Group, the new BoD appointed Mauro Moretti as new CEO and General Manager.”

*Information from Forbes.com and Wikipedia.org

**Video published on YouTube by “webfinmeccanica