France to Revise STX France Proposal

France's economy minister plans to give a revised proposal to his Italian counterparts in the coming days for the sale of a stake in shipyard STX France to Italian state-controlled shipbuilder Fincantieri. France nationalized the large cruise and defense yard at Saint-Nazaire in July rather than see its control sold to Fincantieri. Paris said that it wanted to retain French majority ownership for strategic reasons: the yard is the only one in France that can build aircraft carriers. 

Fincantieri was the preferred bidder in a sale by bankrupt STX Offshore and Shipbuilding of a majority stake in the yard. The French government held the balance of the shares, plus the option to veto the sale of the controlling stake. The outgoing administration of Francois Hollande approved the sale, but the government of newly elected president Emmanuel Macron exercised the veto option and purchased STX Offshore's shares instead – much to Fincantieri's dismay. 

The nationalization is supposed to be temporary, according to French economy minister Bruno Le Maire. “I do not believe it is the future of the Saint-Nazaire shipyards, I do not think it is the best option,” he reiterated on Wednesday. However, he has not given ground on the core question of the control of STX France's operations. The Italian government and Fincantieri have refused to entertain any deal that does not include majority ownership.

Instead, Le Maire has raised the possibility of an alternative that includes Franco-Italian cooperation on defense shipbuilding. French government-controlled defense contractor Naval Group (formerly DCNS) is a part-owner of STX France and a Fincantieri competitor, but Le Maire raised the possibility that the two firms could benefit from the synergies of a defense alliance. “Our strategic objective is for France and Italy to build the Airbus of the naval world, in other words the world’s number one naval industry champion,” he said. The two governments will hold a summit on September 27, and Le Maire hopes that his ministry will be able to find a workable proposal for the Italian side by the time of the meeting.