On January 8, the European commission announced that it agreed to examine the joint request by France and Germany for the acquisition of Chantiers de l’Atlantique (previsouly called “STX France”) by the Italian group Fincantieri. The Commission considers that the transaction could harm competition at European and global level, according to the Press release.
The proposed acquisition does not reach the turnover thresholds set by the EU Merger Regulation for transactions notifiable to the European commission because of their European dimension. However, the plan was notified for authorization in France and Germany.
The Deal’s background
In February 2018, Fincantieri through its subsidiary Fincantieri Europe, signed a share purchase agreement for the acquisition of 50% of the share capital of STX France from the French State, represented by the Agence des Participations de l’Etat (APE). The agreement provides the participation of Naval Group as a shareholder of STX France and represents an important first step towards the creation of a future alliance in both cruise and military naval sectors.
In August 2018, Fincantieri and the China State Shipbuilding Corporation (CSSC) signed a memorandum of understanding to extend their industrial cooperation to all segments of the merchant marine vessel construction. The agreement provides for the creation of a joint venture dedicated to the development of projects in several areas, including vessels for the oil and gas industry, cruise ferries, megayachts, special ships, steel infrastructure and marine engineering. The agreement also requires the construction of vessels for Chinese market in China via the CSSC’s subsidiary Shanghai Waigaoqiao Shipbuilding (SWS).
The notification procedure
The Commission will now ask Fincantieri to notify the transaction. According to the european procedure, the European DG Competition has 25 working days from the notification to take a decision under phase 1 of the investigation. The merger at this point could be cleared, either unconditionally or subject to acceptable remedies. If the merger still raises competition concerns, the DG Competition could open a phase 2 with a deeper analysis of the effects on competition for a final decision within 90 working days.
According French newspaper UsineNouvelle, French presidency sources claimed that “the government is not at the origin of this request, our position has not changed and we are still in favor of rapprochement. »
Italian Prime Minister Giuseppe Conte said he was surprised by the European Commission’s decision to open an investigation into this acquisition. Regarding Italian Deputy Prime Minister Matteo Salvini, the reaction was a bit more aggressive. He accused both France and Germany of sabotaging the merger of the Italian shipbuilder Fincantieri with the French Chantiers de L ’Atlantique, NewEurope explains. “What has happened is extremely serious, France and Germany behaved wrongly. It throws into doubt all accords” Salvini said.