Leonardo will buy a 24.55% stake in Finland’s SSH (SSH1V.HE) to expand its cybersecurity business as Europe’s defense cooperation grows.
The deal will see the Italian defense and aerospace group become SSH’s largest shareholder, underlining Leonardo’s belief that cybersecurity has become essential to interconnected, multi-domain warfare systems. SSH Chief Executive Rami Raulas said defense majors have begun forming joint ventures to share costs and risks on projects such as the new fighter jet being developed by Britain’s BAE Systems, Japan’s Japan Aircraft Industrial Enhancement, and Leonardo, amid US defense policies diverting resources from the EU.
Leonardo, which had revenues of €18 billion ($21.2 billion) last year, expects double-digit percentage growth in its cybersecurity business in the coming years. Giuseppe Panizzardi, Head of M&A at Leonardo, reports that the digital and cybersecurity component will be more integrated into the platforms and will represent an increasingly larger share of the global security offering. The transaction, subject to certain conditions, involves the issuance of shares by SSH for 20 million euros in favor of Leonardo. Upon completion of the transaction, Accendo Capital, the current largest investor in SSH, will hold a 20.87% stake. SSH offers technologies including quantum-secure cryptography.
The deal represents a significant step towards the development of a Zero Trust ecosystem “Made in Europe”, Leonardo said, referring to an approach to cybersecurity that opens a new tab in which all users are considered potential risks.
