By Angelo Amante, Francesca Landini and Elisa Anzolin

ROME (Reuters) – KMW+Nexter Defence Systems is closing in on a 650million euro (or $736 million) binding offer for Leonardo’s OTO Melara/Wass units. This move could help strengthen the company’s position in land defense sector.

Sources close to the matter indicated that the Franco-German alliance is currently conducting research on the units Leonardo, an Italian defense company, has placed on the block. They could then submit their offer at the end of this year or in early 2022.

KNDS faces Fincantieri (an Italian shipbuilder) who expressed interest but hasn’t started formal due diligence. Fincantieri has, however, made a more generous offer so far.

Italian control over Leonardo as well as Fincantieri is determined to finalize the deal.

Rome, as Europe presses for greater cooperation in defense, wants to open up the possibility of cooperation between national and foreign groups. But, it also wants jobs to be protected and growth to grow.

KNDS offered, as part of their proposal, to include Italy into the Main Ground Combat System(MGCS) tank-project. This option would allow Leonardo the opportunity of offering his sensors and electronics in exchange for the tank.

OTO Melara is a manufacturer of naval and terrestrial cannons. It would fit in with KNDS’s range and help it to win a 2.2 million euro contract the Italian army will soon launch.

OTO Melara, Iveco Defence Vehicles and OTO Melara are the current tank suppliers to Italy’s army. Wass makes torpedoes.

According to sources, Fincantieri may decide to work with other groups after having had informal talks with Leonardo regarding OTO Melara.

($1 = 0.8836 euros)