France and Italy reached an agreement on Wednesday on the acquisition of STX by Fincantieri, with the Italian company acquiring 51 percent of the French shipyard, thanks to the loan of 1 percentage point from the French government, France Info radio reported.
The agreement on STX was reached at a Franco-Italian summit held at Lyon in central France and follows weeks of tense talks between French and Italian ministers under pressure to protect commercial interests and strike a politically acceptable solution.
Beyond the resolution of the STX dispute, the heads of Fincantieri and Naval Group have also been authorized to hold talks for consolidation of the surface warship sector, aimed at achieving a “naval Airbus.”
Fincantieri will acquire 50 percent of STX, and France will lend 1 percentage point of its holding for 12 years, afternoon daily Le Monde reported. That allows the Italian shipyard to hold the voting rights and receive share dividends and for Italy to announce hitting its target of owning a majority stake in the French shipyard at Saint-Nazaire in western France.
Under the new deal, France will hold 34 percent of STX, Naval Group 10 percent, STX staff 2 percent and STX local suppliers 3.66 percent, Reuters reported.
Naval Group had received approval from its board of directors to spend up to €20 million (U.S. $23 million) for a stake of up to 15 percent in STX, website La Tribune reported. Naval Group will hold the right of veto on the STX board of directors.
There will be regular meetings to monitor the health of STX and see that Fincantieri honors commitments on employment, governance and intellectual property.
France reserves the right to take back that 1 percent stake, and if there were serious problems, Italy would be bound to sell the 50 percent holding, giving France full control.
STX is presently under a temporary French nationalization.
This share deal would allow Italy to claim victory in acquiring the majority stake, while Paris ends an embarrassing dispute with Rome, Le Monde reported. This is effectively an “elastic privatization” devised by the French Élysées president’s office and the Finance and Economy Ministry.
French President Emmanuel Macron had called for a politically acceptable solution after objecting to Italy taking a majority stake in STX.
There had been concerns of potential layoffs during hard times, a security problem over potential passing of sensitive technology to Fincantieri’s Chinese industrial partner and a sovereignty issue as Saint-Nazaire is the only French shipyard large enough to build naval ships such as aircraft or helicopter carriers.
The chairman and CEO of STX will be Italian, while there will an equal number of French and Italians on the board of directors, Agence-France Presse reported.
Plans for a quickly arranged broad naval tie up between Fincantieri and Naval Group reportedly foundered when French and Italian negotiators realized the complexity of any deal and how it would necessarily drag in Italy’s Leonardo, which provides systems and weaponry for Fincantieri’s naval ships, and France’s Thales, which similarly supplies Naval Group.
Bringing Leonardo hurriedly into talks would have proved a tough challenge for new CEO Alessandro Profumo, who was appointed in March and is still finding his feet after arriving from the banking sector.
Profumo has, however, already shown that he is open to doing business with the French. In an interview this week with Italy’s Corriere della Sera, he said he was happy to maintain Leonardo’s 50-50 joint venture with Airbus building the ATR turboprop aircraft.
“I am very happy to have a partnership with Airbus. It works and makes money,” Profumo said. He also praised Leonardo’s two satellite joint ventures with Thales.
The resolving of the STX row, and the warming of ties between France and Italy may have consequences for another Franco-Italian commercial dispute. Hostility has been growing in Italy towards French media group Vivendi, which is the largest shareholder in Italy’s former state-owned telecoms giant Telecom Italia.
Rome has mulled halting Vivendi control a unit of Telecom Italia — Telecom Italia Sparkle — which manages 11 of the 21 undersea internet cables that pass through the Mediterranean, a key part of the global network of cables that make the internet possible.
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