Leonardo Shares: The Pact with Avio and the 3 March Vote Change the Game

Dear readers,

If you follow the Italian stock market with a particular interest in the defence and aerospace sector, I know you've been keeping an eye on Leonardo shares. In recent weeks, the stock has shown some volatility, but the real earthquake is brewing on the corporate front, and that's where the game that will set the pace for the coming months is being played. I'm talking about the increasingly close tie between Leonardo and Avio, and the crucial deadline of 3 March.

A pact that carries weight, and then some

Those who know me know I'm not a fan of needless technicalities, but here we need to get into the nitty-gritty of the numbers. A few days ago, the agreement linking the giant led by Roberto Cingolani with Avio's top brass officially emerged. We're talking about a shareholder pact that brings together Leonardo, some executives, and the chairman of Avio, representing a significant chunk of the voting capital: 21.72% of the voting rights.

This is no minor skirmish. In a company like Avio, the very heart of European space propulsion, having a bloc like this means being able to steer strategic choices, lock in appointments, and effectively build an ever-stronger bridge with the parent company headquartered in Piazza Monte Grappa. For those investing in Leonardo shares, this is a clear signal: the vertical integration game is getting serious. It's not just about supplies; it's about industrial governance.

Glass Lewis takes the temperature

Into this climate arrives the timely opinion of those who feel the pulse of corporate governance with every beat. Glass Lewis, one of the world's most influential proxy advisory firms, has put its recommendation in black and white ahead of Avio's 3 March meeting. Their advice to shareholders is clear: vote in favour of the proposal for the new board.

Now, anyone who's followed the markets for a while knows this: Glass Lewis's opinion is much more than advice. It's a compass for institutional funds, which often mechanically align themselves with these indications. In other words, the scenario where Leonardo strengthens its influence in Avio has passed the scrutiny of the corporate governance "wise men." The obstacles on paper are thinning out.

Why those watching Leonardo shares need to keep their eyes peeled

Let's try to make sense of this and understand what it all means for the value of the stock. The Stock Exchange always prices in a narrative, and the narrative taking hold is of an increasingly cohesive Italian aerospace hub under Leonardo's direction.

• Industrial synergies: Coordinated management with Avio can lead to efficiencies, streamlining of R&D investments, and greater bargaining power in European programmes (from space launchers to missiles).
• Strategic clarity: Stable and aligned shareholding removes the uncertainties that often penalise sector stocks. Fewer rumours, more action.
• Attractiveness to major funds: Institutional investors love clear-cut situations. A defined control structure makes it easier to include the stock in defence and aerospace-focused portfolios.

Of course, you always have to factor in the political element. Leonardo isn't just any company, and every move is scrutinised closely by Palazzo Chigi and MIMIT. But from this perspective, an industrial strengthening that starts from the grassroots (the pact with managers and the chairman) and gains approval from those who evaluate governance best practices, is exactly the kind of move that meets the least resistance.

My point of view

I've seen dozens of similar operations in twenty years on the job. They often end amicably, with enthusiasm fizzling out at the first hurdle. This time, however, the feeling is different. Leonardo's move on Avio is surgical: not a hostile takeover, but a fine stitching together of agreements and industrial vision. And the 3 March appointment will be the first real test.

My prediction? Beyond the raw outcome of the meeting – which I see as overwhelmingly in favour of the board – what matters is the message that will reach the market: the group led by Cingolani has a free hand and a clear head to build the future. For those holding Leonardo shares, this is an excellent reason to hold on tight, and perhaps take advantage of any pullbacks to increase their position.

The game has just begun, but the stakes are already incredibly high. Be ready.