Italy’s Leonardo signals close to partnership with Türkiye’s Baykar

The chairperson of Italian defense and aerospace firm Leonardo said the company aims to proceed swiftly on the matter of a potential partnership with Turkish drone manufacturer Baykar as the “era of talking” is over, Italy’s state news agency ANSA reported.

In response to a question about whether the process will move fast, Leonardo Chairperson Stefano Pontecorvo said Roberto Cingolani, the company’s CEO, is moving fast on the matter.

“He is almost like a Formula 1 car. So yes, the process will move fast. There is no room for wasting time in the defense industry anymore. The era of talking is over,” he said earlier this week.

Pontecorvo, along with Enterprises and Made in Italy Minister Adolfo Urso, visited Baykar’s production facility in Istanbul last week.

“Baykar is a company run by extremely serious people. If it was not an excellent company, it would not have become a leader in this sector in 12 years,” ANSA quoted Pontecorvo as saying.

“Leonardo does not have a direct relationship with Piaggio Aerospace (which Baykar acquired), but as we aim to partner with the Turks, and if the negotiations go well, we will certainly keep a close eye on such a prestigious Italian company,” he added, referring to the recent acquisition of the historic Italian firm by Baykar.

British daily Financial Times (FT) also reported on Wednesday Leonardo “is close to agreeing on a production partnership” with Baykar, claiming the duo might announce it “as soon as next week.”

“People with knowledge of the discussions said the two companies were set to sign a memorandum of understanding as soon as next week, shaping the terms of a joint venture that could significantly boost Europe’s drone production capabilities,” the report said.

Although details of the Italian-Turkish partnership are yet to be agreed upon, the combination of Leonardo’s technology and Baykar’s platforms “could potentially lead to the development of a high-technology drone” that could operate on the sixth-generation platform, it further said, citing Leonardo’s involvement in next-generation fighter jet under the Global Combat Air Programme (GCAP).

Leonardo declined to comment while Baykar did not immediately respond to FT’s request for comment.

High-tech cooperation

Türkiye and Italy have recently expressed readiness to enhance investment partnerships, especially in the high-tech fields, such as the defense industry, aviation and space.

Visiting Türkiye, Urso held earlier this month talks with Industry and Technology Minister Mehmet Fatih Kacır, hailing the deal between Baykar and Piaggio.

“I visited the factory and introduced the new owner of Piaggio Aerospace to the factory employees and was met with applause,” he said at the time.

“This will also create an opportunity to advance the production of drones, which is an extremely important and new technology area. At the same time, there may be newer ones based on this cooperation. In this way, the factories in Italy will become stronger and go further. These two companies will take stronger steps together in Europe,” he added.

Earlier, Cingolani also visited Baykar facilities, and a Reuters report in January cited a source suggesting the company was about to enter into a partnership with Baykar for unmanned systems.

Strong 2024 performance

The state-controlled group is one of the largest defense companies in Europe, specializing in aerospace, defense and security, with headquarters in Rome.

Last Thursday, it reported financial results for 2024, which were above or in line with the guidance it had set for the year.

Leonardo’s orders, revenues and cash flow were all above the guidance set, with its defense and security businesses offsetting the negative impact of its aerostructures and space units.

“The preliminary results demonstrate the economic, financial and industrial strength of Leonardo, with a medium-term development outlook aligned with the objectives outlined in the industrial plan,” Cingolani said in a statement.

“All of this enables Leonardo to increasingly play a leading role in the global aerospace, defense and security industry … to catalyze new alliances and establish a presence in strategically significant global programs,” he said.

Orders were up 12.2% to 20.9 billion euros ($21.87 billion), driven by the company’s electronics and helicopter sectors, with a backlog ensuring output for 2.5 years.

Cingolani said the increase in free operating cash flow had allowed the defense conglomerate to reduce debt – now down to just under 1.8 billion euros. He said the company would pay a dividend twice as large as the previous year.

Pontecorvo meanwhile also told the Genoa-based Il Secolo XIX newspaper: “We will soon have very good news about possible cooperation with Piaggio, which was bought by the Turks. Baykar is the world leader, and we are in talks to try to cooperate. If it is successful, the return to that region will be spectacular.”

Baykar, the manufacturer of popular Bayraktar TB2 and Akıncı drones and developer of uncrewed stealth fighter jet Kızılelma, acquired Italian aerospace giant Piaggio Aerospace in December, and Italy’s Made in Italy Ministry made statements regarding Leonardo’s possible cooperation with Baykar.