France threatens to take over shipyard from Italians

PARIS - 26 July 2017:France threatened Wednesday to take over the STX France shipyard from Italy's Fincantieri if it didn't agree to a deal giving the French government a 50 percent stake.

"We want to be able to have 50-50 control with our Italian friends, over the future of the work sites, employment and development of the area," French Economy Minister Bruno Le Maire said on Franceinfo radio.

But "if ever our Italian friends refuse the honest offer we have made them the French state will exercise its right of preemption" to acquire control of the shipyard where some of the world's biggest cruise ships have been built, he warned.

The government of former president Francois Hollande approved in April the sale of the shipyard in western France by South Korea's STX Shipbuilding that gave Fincantieri a controlling stake along with an Italian partner.

Although the Italian shipbuilding firm gave guarantees on jobs, new French President Emmanuel Macron in May said he wanted to renegotiate the deal to preserve employment.

Fincantieri chief Giuseppe Bono expressed confidence of reaching a deal with Paris, but on the condition it "creates value".

"For us and the government, on this point, there is total engagement," he said in a conference call on earnings results.

A source close to Italy's economy ministry told AFP the Italian authorities are open to talking about modification of the agreement on the STX France shipyard.

However, the Italian authorities see Fincantieri retaining a majority of the capital and management control as being non-negotiable.

Le Maire said acquiring control of the shipyard would cost the French state in the tens of millions of euros, but would give it additional time to negotiate a new shareholders arrangement.

A French proposal earlier this week offered equal control over the shipyard, with deeper cooperation between Paris and Rome in naval affairs as a sweetener.

Shares in Fincantieri plunged more than 10 percent in morning trading in Milan after Le Maire's comments.