Fincantieri set to pick Telecom Italia's cybersecurity boss to head defence unit, sources say

By Elvira Pollina and Giulia Segreti

ROME (Reuters) -Italy's Fincantieri is poised to appoint Eugenio Santagata, a former army official and top executive at Telecom Italia's cybersecurity unit Telsy, to head its defence division, two sources familiar with the matter told Reuters.

The shipbuilder is working to position its defence business and submarine arm to tap a big rise in European military spending.

Only weeks after being confirmed at the helm of the state-controlled company, Chief Executive Pierroberto Folgiero launched a formal search for a successor to Dario Deste, general manager of the naval vessels division who is due to retire on August 31, the sources said.

Fincantieri and Telecom Italia (TIM) declined to comment.

Santagata has also been TIM's chief public affairs and security officer since 2022 and was a captain in the Italian army. In its search, Fincantieri assessed both internal and external candidates, one of the sources added.

Santagata's candidacy is supported by the Italian government, which owns over 70% of Fincantieri's capital, the sources said, speaking on condition of anonymity.

In its industrial plan, due to be revised by the end of the year, the shipbuilder has projected the naval division will account for 30% of total revenues in 2027 from 20% in 2024, with increasing profit margins.

Analysts expect these forecasts to be improved as geopolitical tensions boost defence spending.

"Forecasts are predominantly driven by growth in the Naval segment, supported by a number of export opportunities in Europe, in Saudi Arabia, and the Far East," Mediobanca wrote in a recent report, referring to Fincantieri.

The group is also in a position to increase its production capacity quickly given it builds both civil and military ships, Folgiero recently told Italian daily Corriere della Sera.

(Reporting by Elvira Pollina in Milan and Giulia Segreti in Rome. Editing by Mark Potter)