Moody's affirms Finmeccanica

Moody's Investors Service said it affirmed Finmeccanica S.p.A's Baa2 long-term debt rating. The outlook is stable.

The rating affirmation follows the company's announcement that it has signed a Heads of Agreement with GKN plc containing the main terms for the acquisition of the remaining 50% shareholding in AgustaWestland, a leading global helicopter maker, that it does not already own for about €1.5 billion, as well as real estate assets currently owned by GKN and already used by the joint venture for about €93 million.

The total purchase price of about €1.6 billion will be funded primarily from the monetization of shares of STMicroelectronics NV owned by Finmeccanica, through operations carried out at market conditions to eligible Italian counterparties. The transaction is expected to close in the fourth quarter of 2004.

The rating affirmation considers that the buy-in of the remaining interest in AgustaWestland is consistent with Finmeccanica's strategy of transitioning itself from a financial holding company into a distinctly recognizable industrial company with more control of its assets. The acquisition will give Finmeccanica full control of AgustaWestland, improve the effectiveness of management of the business, and allow the company to consolidate the full revenue, earnings and cash flow generated by the business.

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