Italian/French yard takeover faces EU investigation

Italian yard Fincantieri faces a full-scale European Union competition investigation into its takeover bid for French yard Chantiers de l'Atlantique on concerns the deal would reduce competition, sources said. The European Commission's preliminary review of the deal ended in October. It will follow up with an in-depth investigation, the sources said. This lasts 90 working days but could stretch to as long as five months.
The EU competition enforcer is worried the number of European yards building cruise ships will be cut to two from three as a result of the deal, the sources said. The other competitor is German shipyard Meyer Werft. Fincantieri has argued Asian shipyards could pose strong competition in cruise vessel shipbuilding in the next decade to try to calm the Commission's worries, sources said. However this is not sufficient and it may have to offer concessions, they added. The Italian state holds a majority shareholding in Fincantieri. The Commission declined to comment.
Earlier this year, the EU Commission said the deal, in which Fincantieri will acquire a 50% stake in Chantiers from the French state, could significantly harm competition in shipbuilding, in particular the global cruise ship market. France also agreed to lend a 1% shareholding to Fincantieri to allow it to take effective control on condition the company makes commitments on jobs, governance and intellectual property. Based in Saint-Nazaire in western France, Chantiers was previously called STX France. The Saint-Nazaire yard is the only one big enough in France to build aircraft carriers and other large warships, making it a strategic national asset. "We do not comment on rumours," a spokesman for the French economy ministry said.