Shipbuilding merger collapses

2021-02-12T18:57:43+00:00 February 12th, 2021|Finance|

The French and Italian Finance Ministries have pulled the plug on the proposed merger between Fincantieri and Chantiers de l’Atlantique (pictured), two of the largest cruise ship builders.

The deal collapsed due to the coronavirus crisis and competition concerns.

Both governments said the merger had been rendered unviable by the Covid-19 pandemic and concerns that the deal would lead to more industry concentration and higher prices.

“The tourism sector is currently facing an unprecedented level of economic uncertainty due to the Covid-19 crisis, which does not allow the operation to continue,” said the French and Italian Finance Ministers in a joint statement.

European regulators, which had not finished analysing the deal, had said they expected the shipbuilding market to bounce back, undermining arguments consolidation was necessary to protect the sector.

An agreement to continue the merger, due to expire at the end of January, had been extended five times, but both governments ruled out another extension.

“In the context of the health crisis and the lack of visibility on the recovery of the shipbuilding market, the European Commission has not terminated the proceedings,” said the French and Italian joint statement.

This transaction was one of the few complex deals that were being examined by EU regulators in Brussels.

In another move, Fincantieri has announced that its included its Services Division within its Merchant Ships Division, thus representing a unique point of reference for shipowners.

The enhanced activities will also comprise the supervision and co-ordination of Fincantieri Services US, the Group’s subsidiary based in Miami, representing the centre of all the Group’s service and after-sales activities on cruise ships in the US.

Daniele Fanara will be at the head of the business unit, assisted by Andrew Toso as deputy, reporting directly to Luigi Matarazzo, Fincantieri Merchant Ships Division’s General Manager.

The change will also result in widespread benefits for the other Fincantieri companies, notably for the furniture and the electrical and mechanical systems hubs, with further enhanced products and services by a wider range of operators.

Specifically, the most involved activities within the reorganisation will be the refurbishment of cabins, public spaces and catering areas, the installation and replacement of stabilisers and thrusters, the introduction of new propulsion and energy systems in terms of energy saving and emission reduction, the modernisation of air conditioning systems also combined with air sanitisation systems.

Giuseppe Bono, Fincantieri CEO, commented: “Considering that one in three ships of the current global cruise fleet has been built by us, this operation will allow us to fully exploit the wealth of experience and knowledge of our different ship platforms.

“Thus, we will be able to offer our clients increasingly specialised and advanced works that can renew and extend the units’ life,” he said.