Italian business aircraft manufactuerer and subcontractor Piaggio Aero Industries has confirmed that Mubadala Development, a wholly-owned investment vehicle of the Abu Dhabi government, is to take a 35% stake.
The deal was first rumoured in mid-March and has taken several weeks to complete, due to the structure of the deal. Mubadala’s 35% share comprises the purchase of some existing shares and the creation of some new shares. Piaggio's primary shareholders, the Ferrari automotive family and that of chief executive Josè di Mase, will see their combined stake reduced to 55%, with private sharteholders and institutional investors together holding an additional 10% of the company.
Financial details of the acqusiition have not been divulged, but the level of investment was previously thought to be around €20 million ($22.4 million), which corresponds to the sum paid by Ferrari and di Mase famililes to buy back a holding of around 20% purchased in 2003 by the Italian state investment agency Sviluppo Italia.
Whatever the size of the cash injection, it is thought to be needed to kick-start development of a new light business jet to join the P180 Avanti II twin pusher. Di Mase says: "We are heavily engaged in strategic planning for our industrial and commercial development and this new partnership allows us to build on our success of recent years through increased production”.
The deal will see Mubadala receive three of the seven seats on the Piaggio board and will appoint the vice chairman. Mubadala will also receive one of the three seats on the company’s executive management committee.
"We are honoured that Mubadala Development has chosen to invest in Piaggio Aero,” says Piero Ferrari, chairman of Piaggio. “This deal places us in a position to further grow our position in [Europe and North America] whilst beginning to explore new markets, including the Middle East, Far East and South America - each of which offers high potential for sales,” he says.
Khaldoon Al Mubarak, Mubadala chief executive says: “For us this investment makes commercial sense on two levels: As a straight investment opportunity Piaggio Aero has a remarkable performance track record, Importantly, the transaction also offers the opportunity to explore potential synergies".
However, Piaggio also supplies the low-pressure turbine case and the bearing compartment housings to Pratt & Whitney for the F135 engine, powering the Lockheed Martin F-35 Joint Strike Fighter, and any Gulf state investment could be investigated by US authorities.
Read Flight International editor Murdo Morrison on why the business aviation community should get ready for more investment from the Gulf states