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Leonardo DRS and RADA Agree to All-Stock Merger

Strategic Move Reinforces Core Stengths

Leonardo DRS and RADA Electronic Industries have agreed to an all-stock merger, creating a new public company, the companies announced on 21 June. RADA is a leading provider of advanced software-defined military tactical radars, serving attractive, high-growth markets, including critical infrastructure protection, border surveillance, active military protection and counter-drone applications.

Alessandro Profumo, Leonardo CEO, stated: “There is an excellent fit between our US subsidiary Leonardo DRS and RADA: strategically, commercially and financially. As promised, we have focused the Leonardo DRS portfolio and we are now reinforcing DRS with RADA in core strategic businesses, providing growth, further margin expansion and opportunities in the wider Leonardo Group. We have agreed to an all-stock merger transaction, also seizing the opportunity of listing DRS in the current context of volatile markets, thus delivering on what we promised last year.”

Leonardo has successfully reinforced the DRS brand and competitive positioning of late, focusing on its core business and now adding a strong business in active defence solutions. “The combination of RADA’s tactical radar capabilities and Leonardo DRS’ strength as a premier mid-tier defense provider make the combined company a leader in the rapidly growing force protection market, increases our addressable market, expands international opportunities and ultimately unlocks value for shareholders,” said William J Lynn III, CEO of Leonardo DRS.

Leonardo DRS will acquire 100% of the share capital of RADA in exchange for 19.5% equity ownership to RADA shareholders in Leonardo DRS, with Leonardo maintaining 80.5% in Leonardo DRS through its US subsidiary Leonardo US Holding (subject to approval of the stockholders of RADA and other closing conditions including the receipt of certain regulatory approvals). Closing of the transaction is expected in the fourth quarter of 2022.

Typical of RADA’s product solutions is the hemispheric radar (MHR) that features in the US Army’s M-SHORAD Stryker A1 vehicle. (RADA Electronic Industries)

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