Italy, France still split over Fincantieri bid for STX shipyard

[ROME] France and Italy failed to find common ground over the STX shipyard on France's Atlantic coast, with the intense negotiations that have strained relations between the two governments set to continue into next month.

"Our positions remain very different," Italian Economic Development Minister Carlo Calenda said in Rome on Tuesday at the end of a meeting that included the French and Italian finance ministers. In the talks, which lasted less than an hour, Italy didn't budge from its demand that Fincantieri SpA and Italian banking foundation CR Trieste have a majority stake in STX, according to a person familiar with the discussions. Italy said it "deeply regrets" France's position on STX.

In a joint statement, the two sides said they will seek to make progress on STX, as well as on planned Franco-Italian naval cooperation, by Sept 27, the date of scheduled talks between the two governments.

"There will be time from now to Sept 27 to close differences," Italian Finance Minister Pier Carlo Padoan told reporters in Rome. His French counterpart, Bruno Le Maire, said both governments have a "political responsibility to overcome" their differences.

"We're going to open talks in coming days, both on the composition of STX's capital and on civilian and military naval cooperation," Mr Le Maire said.

The Rome meeting followed intense negotiations and barbed comments from both sides after French President Emmanuel Macron froze a bid for the STX facility from Trieste-based Fincantieri. About a month before Mr Macron was elected, the Italian company had agreed to buy 48 per cent of the shipbuilder from South Korea's STX Offshore & Shipbuilding Co Ltd with about another 6 per cent going to CR Trieste. Mr Macron said that meant Italy would effectively control the firm and refused to accept it.

Mr Le Maire said last week that France, which already owns 33 per cent of the 155-year-old shipyard, would nationalise the company to block Fincantieri's bid. He said it is "a temporary decision" that aims to "defend France's strategic interests in shipbuilding." The Italian government has insisted that Fincantieri won't invest unless the Italian firms can amass a majority stake between them.

According to the joint statement on Tuesday, "the stake of Fincantieri in STX France shall be defined in line with its leading industrial role" under a "mutually acceptable solution" by Sept 27. Until then, "the French State commits not to open the capital of STX France to any third party and to consider Fincantieri as its preferred option for the future of the company," according to the statement.

"We feel that the decision taken by the French government not to follow through on accords that had already been concluded is serious and incomprehensible," Mr Padoan and Mr Calenda said in a statement on July 27. "Nationalism and protectionism are not an acceptable basis for a relationship between two major European countries."

BLOOMBERG