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 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 tight relationship between Leonardo and Avio, and the crucial deadline of March 3rd.

A pact that carries serious weight

Those who know me know I'm not a fan of pointless 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 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 slice 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 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. For those investing in Leonardo shares, this is a clear signal: the vertical integration game is getting serious. It's not just about supply chains; it's about industrial governance.

Glass Lewis's take

In this climate, the opinion of those who have their finger on the pulse of corporate governance arrives 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, anyone who's followed the markets for a while knows that Glass Lewis's opinion is much more than just advice. It's a compass for institutional funds, which often mechanically align with these recommendations. In other words, the scenario where Leonardo strengthens its influence over 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 stock's value. The stock market always prices in a narrative, and the narrative that's solidifying 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 investment, and greater bargaining power in European programs (from space launchers to missiles).
• Strategic clarity: Stable and aligned shareholding removes the uncertainties that often penalise sector stocks. Fewer rumours, more action.
• Appeal to big funds: Institutional investors love clear-cut situations. A defined control structure makes the stock easier to include in dedicated defence and aerospace 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 the government. But from this perspective, an industrial strengthening that starts from within (the pact with managers and the chair) and receives the nod of approval from governance best-practice assessors is exactly the kind of move that faces the least resistance.

My point of view

I've seen dozens of similar moves in twenty years on the job. They often end up being much ado about nothing, with enthusiasm fizzling out at the first hurdle. This time, though, the feeling is different. Leonardo's move on Avio is surgical: not a hostile takeover, but a careful stitching together of agreements and industrial vision. And the March 3rd date will be the first real test.

My prediction? Beyond the raw outcome of the meeting – which I see as heavily in favour of the board – what matters is the message sent to 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 sky-high. Be ready.