Fincantieri to get control of STX France, but with strings attached

French hopes are that the St. Nazaire shipyards will again be known as Chantiers de l'Atlantique

SEPTEMBER 28, 2017 — France’s Minister of the Economy, Bruno Le Maire, is headed to the STX France shipyard in Saint-Nazaire today to meet with unions to explain the details of an agreement reached by the French and Italian governments that will see Fincantieri take control of the company.

The two governments managed to resolve their differences by what newspaper Le Figaro calls “a conjuring trick,” involving one percent of the STX France shares.

“After two months of negotiations” says the newspaper, “financial engineering produced a political miracle that allows France to claim 50% of the capital and Italy to rely on 51%. The trick: the French state will lend 1% of the capital to the Italian group.”

This will give Fincantieri control of the yard. However, France has reportedly leveraged that one percent shareholding to gain commitments from the Italian company that French shipbuilding knowhow will not be leaked to China.

According to French media reports, the French state is to hold a 34.4% stake in the company, with Naval Group (the former DCNS) holding 10%, employees 2.4% and subcontractors 3.7%. These shareholders will have a right of veto over the nomination of the shipbuilder’s top executive, dividend policy — and even the name, which France hopes will once again be Chantiers de l’Atlantique.

Le Figaro quotes a source as saying that the French state will be able to take back the one percent of shares loaned to Fincantieri on the second, fifth, eighth and twelfth anniversaries of the agreement.

The Italian group has given assurances on maintenance of jobs, know-how, intellectual property, subcontracting and other issues.

In conjunction with the agreement on the future of STX France, the French and Italian governments are to set up a working group on establishment of a naval shipbuilding alliance between Fincantieri and Naval Group.

In a joint statement, the two companies said:

Naval Group and Fincantieri welcome today’s decision of the French and Italian governments to launch a joint process paving the way for the future creation of a progressive alliance in the naval defense sector.

The two groups will play a key role in the steering committee that will be launched within the next few days with the objective to define by June 2018 a roadmap detailing the principles of the future alliance.

Furthermore, the agreement reached today by the two Governments on the shareholding structure of STX France foreseeing the presence of both Naval Group and Fincantieri represents a first important step and an opportunity to go forward in naval cooperation.

Naval Group CEO Hervé Guillou and Fincantieri CEO Giuseppe Bono declared: “Our two groups have already successfully cooperated on the Horizon and FREMM frigates programs and we look forward to achieving together our European ambition while serving our international development on a growing competitive naval defence market and continuing to support the Italian and French navies.”