Leonardo Shares: The Pact with Avio and the March 3rd 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 a close watch 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 tight connection between Leonardo and Avio, and the crucial deadline of March 3rd.

A pact that carries significant weight

Those who know me understand that I'm not a fan of unnecessary technicalities, but here we need to get into the specifics of the numbers. A few days ago, the agreement linking the conglomerate led by Roberto Cingolani with Avio's top management was officially revealed. We're talking about a shareholders' agreement that brings together Leonardo, some executives, and the chairman of Avio, representing a significant portion of the voting capital: 21.72% of the voting rights.

This is no minor skirmish. In a company like Avio, the beating heart of European space propulsion, having such a block means being able to steer strategic choices, secure appointments, and effectively build an even stronger bridge with the parent company based 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's take

In this climate, the opinion of those who monitor the pulse of corporate governance has arrived right on cue. Glass Lewis, one of the world's most influential proxy advisory firms, has put its recommendation in black and white ahead of Avio's March 3rd meeting. Their advice to shareholders is clear: vote in favour of the proposal for the new board.

Now, seasoned market followers know this: Glass Lewis's opinion is much more than just advice. It's a compass for institutional funds, which often mechanically align with these indications. In other words, the scenario where Leonardo strengthens its influence over Avio has passed the scrutiny of corporate governance "experts." The potential hurdles on paper are thinning out.

Why those watching Leonardo shares need to stay alert

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

• Industrial synergies: Coordinated management with Avio can lead to efficiencies, streamlined 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.
• Appeal for major funds: Institutional investors love clear situations. A defined control structure makes it easier to include the stock in defence and aerospace-focused portfolios.

Of course, one must always factor in the political element. Leonardo is not just any company, and every move is scrutinised closely by the Prime Minister's office and the Ministry of Enterprises (MIMIT). But from this perspective, an industrial strengthening that originates from within (the pact with managers and the chairman) and receives praise from governance best practice evaluators is exactly the kind of move that faces the least resistance.

My point of view

I've seen dozens of similar operations in twenty years in this business. They often end in goodwill and camaraderie, with enthusiasm fizzling out at the first obstacle. 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 March 3rd appointment will be the first real test.

My prediction? Beyond the final outcome of the meeting – which I see as widely 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 vision to build the future. For those holding Leonardo shares, this is an excellent reason to hold onto them tightly, and perhaps take advantage of any pullbacks to increase their position.

The game has just begun, but the stakes are already extremely high. Stay ready.