Citing the impact of COVID-19 and the current economic
situation, France and Italy announced jointly that they have agreed not to
proceed with the merger of two of Europe’s largest shipbuilders, Chantiers de
l’Atlantique and Fincantieri. First proposed in February 2018, the completion
of the merger of the two state-owned shipbuilding companies had been delayed
pending an anti-trust review and approval from the European Commission.
A joint statement issued by France’s Minister of the Economy
and Finances and Italy’s Minister of Economic Development said that following a
telephone conversation with Margrethe Vestager, Executive Vice President of the
European Commission, France, and Italy had determined “that the current
economic context does not allow the continuation of the planned merger.” They
announced that the agreement for the transfer of Chantiers de l'Atlantique,
signed by the French State, and Fincantieri on February 2, 2018, will end on
January 31, 2021, after being extended five times.
“In order to allow the two companies to focus on their exit
strategy from the crisis and on new projects, France and Italy have drawn
conclusions from the lack of decision of the European Commission and the
economic and health context,” according to the written statement issued by both
governments.
The agreement to merge the operation of the two shipyards
had come about after France took control of the then STX France operation after
the collapse of the South Korean company. A shipyard with a
long history building
both passenger ships as well as naval vessels, France considered the yard,
which reverted to its original name, as a strategic asset for the country and a
major employer. The French yard had in recent years expanded its business as a
builder of the world’s largest cruise ships competing with Fincantieri in Italy
and Meyer Werft with its operations in Germany and Finland.
France and Italy had also built cooperation on several naval
projects being carried out jointly by the two companies. Speaking about the
merits of the cooperation in 2018, Fincantieri CEO Guiseppe Bono described the
agreements as the creation of what he has dubbed an "Airbus of the
Seas." The two state-owned companies Bono said were top vendors in the
defense sector, and by combining their capabilities would be better able to
counter competition from China and other competitors on the international
market.
The merger of Chantiers and Fincantieri had, however, faced
an uphill battle after the European Commission expressed doubts about the
impact of the transaction in terms of competition. At the end of October 2019,
the European Commission announced it had decided to open an in-depth
investigation into the proposed merger citing specific concerns about
competition for the construction of cruise ships.
Due to expire at the end of 2020 after the previous
extensions, the French government had agreed to a one month extension until
January 31, 2021. At the time, the Italian and French governments said they
planned to write to the EU Competition and Industry Commission urging them to
finalize the inquiry into the deal.
In announcing the decision not to extend the agreement past
the end of this week, both countries reaffirm the strength of their ties in
terms of economic cooperation, particularly in the industrial sector. French
also said that it would continue to support Chantiers de l'Atlantique as its
main shareholder for as long as the current crisis will last.