February 27, 2021

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Italy and France ditch plans to create shipbuilding champion

2 min read
Failed effort to combine two shipyards a test of EU’s 'strategic autonomy.'

Rome and Paris on Wednesday dropped plans to create a European champion in cruise-ship construction by combining France’s Chantiers de l’Atlantique and Italy’s Fincantieri.

“The tourism sector is currently facing an unprecedented level of economic uncertainty due to the crisis of COVID-19 which does not allow the continuation of the deal,” the French and Italian industry ministries said in a joint announcement.

The deal was a symbol of the EU’s push for “strategic autonomy” to bolster Europe’s companies to compete in global markets. The highly political takeover would have seen the Italian company assume control of the French dockyard.

But the countries opted to abandon the deal in a call between EU Competition Commissioner Margrethe Vestager, Italy’s Industry Minister Stefano Patuanelli and his French counterpart Bruno Le Maire on Wednesday evening.

“The world in 2017 is unfortunately very different from the one in 2021. The appropriateness of the project, which was evident in 2017, is no longer there today,” the French economy ministry told journalists.

The decision comes four days before a deadline to complete the merger, which had already been extended five times. Asked whether France was looking for another buyer, the ministry said Wednesday there was no urgency to sell since the Chantiers’ order book is “full.”

The €59.7 million merger had a slim chance of getting the green light from the EU’s competition officials, since it would have left a single competitor in the cruise-shipbuilding sector: Germany’s Meyer Werft. The European Commission launched an in-depth competition probe into the deal in 2019, but put the investigation on hold in March last year when the coronavirus pandemic hit.

Brussels had been waiting for the shipyards to submit additional information before taking a decision on whether to approve the plans — a decision widely seen as a test of any appetite from the EU to relax merger rules, under pressure from countries including France and Italy.

Vestager on Tuesday made clear that Brussels was not responsible for the delays in the merger process. “It is for the merging parties … and for France and Italy to decide what happens next,” Vestager told journalists.

The merger plans were announced in 2017 by French President Emmanuel Macron and then-Italian Prime Minister Paolo Gentiloni. Despite initial resistance from Paris, the leaders promised the move would create “a global champion in the naval sector.”

Fincantieri declined to comment.

Source: POLITICO https://www.politico.eu/article/italy-and-france-ditch-plans-to-create-shipbuilding-champion/?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication

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