France will pitch to Italy a cooperation in building warships in a bid to resolve a dispute over an Italian acquisition of STX, a commercial shipyard, a French minister said.
“Well, we are saying to our Italian friends: Let’s also see what we can do in the military sector, particularly in surface warships, and let’s build a great European champion in the naval industry,” French Economy Minister Bruno Le Maire said in Sunday paper Journal de Dimanche.
Le Maire is due to fly to Rome on Tuesday for talks with his Italian counterpart, Pier Carlo Padoan, to resolve a dispute over a takeover of STX by Italian state-owned Fincantieri.
The French concern is that the STX shipyard is large enough to build an aircraft carrier or similar large naval vessel, and French jobs at Fincantieri might transfer work to Italian facilities in a market downturn.
Up to now, the assumption has been for a Franco-Italian cooperation in the civil industrial sector, namely building cruise liners, Le Maire said. French President Emmanuel Macron has asked for the talks with Italy to extend to military cooperation, he added.
It remains to be seen if the Italian authorities will agree.
“If there is no agreement, we will stay with the present situation, and we will look for other bidders,” Le Maire said. “But we do not want to go that way.”
France took an unusual step last week to nationalize STX to prevent an acquisition by Fincantieri, stressing that the measure is temporary to win time to negotiate an ownership that protects French sovereignty.
Naval Group, formerly DCNS, said the company has long looked for European industrial cooperation.
“The pursuit of discussions with Fincantieri would allow us to intensify the cooperation between the two groups,” a spokesman for Naval Group told Defense News.
The French government’s effort to block the Fincantieri takeover appeared odd, as the bid came from a European company and is 71.6 percent owned by the Italian state, according to think tank French Institute for the Research on Public Administration and Politics.
Macron has emphasized his search for a strong European base, yet the French head of state called for nationalization to block the Italian bid.
That move against a European firm followed the previous ownership of STX by Korean and Norwegian companies, the think tank said. French anxiety of the potential transfer of technology by Fincantieri to its Chinese industrial partner was also strange, as the Italian state holds a large majority stake in Fincantieri.
It was also strange to consider that Fincantieri would sacrifice STX, as the former would be a shareholder that would want to boost the value of its subsidiary, the think tank said.
Naval Group and Fincantieri agreed in 2015 on a road map to study potential cooperation on technology and equipment on the French multimission frigate.
France and Italy worked together to develop and build the Horizon air defense frigate and multimission frigate, with the level of common equipment on the latter falling sharply compared to the former. The two countries also worked together on the MU90 lightweight torpedo.
On STX, France wanted itself and Italy to each have a 50 percent shareholding in the company, depriving Fincantieri of a majority stake, a proposal rejected by Rome. That rejection prompted France to announce the nationalization plan.
France has preemption rights to take over STX France, as the government holds a 33.3 percent stake in the shipbuilder, based at Saint-Nazaire, western France.
Korea’s STX was bankrupt, and Fincantieri was named as the preferred bidder for its controlling stake.
France has launched a program for an intermediate frigate, while Italy is committed to the PPA multifunctional ship for civil and naval missions.
