RTX threatens legal action against Italy over Microtecnica sale

ROME — The American defense giant RTX is threatening to take the Italian government to court for blocking the

RTX threatens legal action against Italy over Microtecnica sale

ROME — The American defense giant RTX is threatening to take the Italian government to court for blocking the sale of an aerospace unit in Italy to the French firm Safran.

RTX, formerly known as Raytheon Technologies, had planned to sell Microtecnica to Safran. Microtecnica is an Italian company that makes components for the Eurofighter jet built by Italy, Germany, the U.K. and Spain.

Microtecnica is currently owned by RTX subsidiary Collins Aerospace, and is part of Collins’ flight controls business, which was to be sold to Safran in a $1.8 billion deal announced last July.

But in November, the Italian government blocked the planned sale of Microtecnica. Sources in Italy with knowledge of the decision said the current geopolitical environment makes it an unsuitable time for such deals, as they could jeopardize the Italian military’s access to crucial components.

To block the sale, Italy invoked its so-called Golden Power legislation, which allows the government to halt purchases of strategic local firms by overseas buyers.

At the time, Safran CEO Olivier Andries told the Financial Times he opposed the veto. “They assume the worst about our intentions that we will not fairly support or prioritise the Eurofighter,” the news outlet quoted him as saying.

Now, RTX and Safran are preparing to challenge the veto in court, said Jeff Shockey, the head of RTX’s global government relations.

“We and Safran will be filing appeals, which is necessary to preserve the global transaction,” he said in a statement. “We acknowledge the Italian government’s decision. However, we remain convinced the transaction would be good for Microtecnica, its customers, its employees, and all the other stakeholders involved.

“For this reason, we continue to be committed to the transaction and look forward to finding a solution to address any concerns that the Italian government may have.”

But if the involved parties can strike a deal to allay the government’s concerns outside a courtroom, RTX is prepared to do so, he said. “We look forward to the opportunity to resolve the matter through a constructive dialogue with the Italian Government outside of the appeal process.”

Italian union leaders, who learned of the planned appeal by Microtecnica management in Turin, Italy when they met Thursday, are backing the legal challenge.

“What were motives for this unexpected decision by the Italian government?” said Edi Lezzi, the Turin head of the FIOM union, which represents staff among the 600-plus Microtecnica employees in northern Italy.

“Who is taking care of this? The employees are stuck in the middle,” Lezzi added. “Microtecnica is healthy and profitable, and it is not professional if Defence Minister [Guido] Crosetto and Prime Minister [Giorgia Meloni] do not explain this choice, which could have a significant economic impact on the regions of Lombardy and Piedmont.”

Announcing its plan to purchase Collins Aerospace’s actuation and flight control activities last July, Safran said it would be acquiring eight facilities in France, the U.K. and Italy, as well as in Asia, employing about 3,700. These locations were expected to see sales of approximately $1.5 billion in 2024.

Introduced in 2012, Italy’s Golden Power rule is normally used to block Chinese takeovers of strategic firms. In 2021, Italian police raided an Italian drone maker which had allegedly been sold to China without alerting the Italian government, thus evading Golden Power sanctions.

RTX is the second largest company in the world based on defense-related revenue, according to Defense News’ Top 100 list. Safran ranked 28th on the list.

Tom Kington is the Italy correspondent for Defense News.

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