MSC Preziosa line cruiser leaves the STX shipyard in Saint-Nazaire
28 September 2017

The STX France deal aims at creating a world champion in the naval industry

The deal between STX France and Fincantieri, signed on 27 September during the Franco-Italian summit, is a balanced agreement that reflects the two countries' shared commitment to furthering their cooperation in the shipbuilding industry. It will allow operational oversight of the shipyards and provide long-term guarantees in terms of jobs, expertise and subcontracting.
 
Last July, the Government had decided to temporarily nationalise STX France, to allow time for a better agreement to emerge with the Italian partner Fincantieri, which will protect jobs, the local industrial fabric and France's strategic interests better. For Bruno Le Maire, Minister of Economy and Finance, "The Saint-Nazaire shipyards are a unique industrial asset in France. As such, we want to reassure not just the workforce, but also the region, customers, subcontractors and French society as a whole that the outstanding skills of the shipyards in terms of shipbuilding will remain in France".
 

 "A win-win agreement"

The deal reached between France and Italy during the Franco-Italian summit is a balanced agreement which will allow operational oversight of shipyards and offer the French side the guarantees they are after, whether in terms of jobs, expertise or subcontracting – over the long term: "today we can both say that this is a win-win agreement (...) We have settled for 50-50, with genuine guarantees," hailed the President of the Republic.
 
This deal includes all of the guarantees that Fincantieri brought to the initial agreement. The following will thus be preserved: 
 
  • the secure future of the site and its business: keeping the order book in France, keeping up the planned investments, possibility for the French State to object to any cessation of activity and to exercise a right of first refusal in the event of transfer of shares or change in control of Fincantieri;
  • jobs and subcontracting commitments in the region will be upheld: Fincantieri undertakes not to cut jobs for 5 years and to comply with the three-yearly hiring plan;
  • protection of intellectual property and expertise: possibility for the State to object to any transfer of this type outside Europe or to any new subsidiary or significant investment on the part of the Italian partners; Fincantieri undertakes to maintain the engineering capabilities of Chantiers de l'Atlantique;
  • STX's commercial independence: Fincantieri pledges to continue allowing STX France's "Quotation department" and "Project department" to operate independently and the State may exercise a right to veto over the name of the Chantiers (Shipyards);
  • preservation of France's military interests: Fincantieri undertakes to have STX France strike a deal with Naval Group, extending the current agreements on large vessels and dividing up each party's prerogatives in the military sphere. This agreement will guarantee the State a right to access specific facilities (large dry dock) of STX France within timeframes that are compatible with its needs. The State and Naval Group will also have veto powers over military proposals and strategic military partnerships.
The new agreement provides greater assurances for French interests. Fincantieri acquires 50% of the capital + 1% loaned by the French State, which nevertheless retains the possibility of ending this loan at any time if it feels that the guarantees have not been honoured. In this case the Italians would no longer hold a majority stake (50%).
 

A world champion in the naval industry

This agreement will make Chantiers de l’Atlantique stronger: both by shoring them up with a fully-fledged industrial shareholder, poised to support the Chantiers in their growth, and by giving concrete form to the rallying of the whole local fabric round the company strategy, through the increased stake in a group of companies deriving from the Shipyard ecosystem.
 
The deal reached is part of broader efforts on behalf of France and Italy alike to further their cooperation in the shipbuilding industry. Against this backdrop, Fincantieri and Naval Group are intending to set up a working group with representatives of their respective governments, with a view to hashing out a solid alliance in the future.


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