Yet on France’s front, this model lived a rather short life, as in 2017, Fincantieri announced having reached a deal to purchase a 50% stake in the company from the French state.  

As part of the deal, Reuters reported at the time, Paris also agreed to lend a 1% stake to Fincantieri for 12 years, effectively giving it voting rights and access to Chantiers de l’Atlantique’s share dividends. In return, the Italian company made a number of commitments on jobs, governance and intellectual property. 

However, as of February 2020, the deal is still yet to come to life. In January 2019, the transaction was suspended and brought to the attention of the EC by the German and French governments, who jointly signed a referral to the EU antitrust authority. 

Although Paris has not disclosed the reasons behind its U-turn, Touati says that the prospect of becoming a minority shareholder in Chantiers de l’Atlantique could have influenced the decision. “If the transaction does take place,” he explains, “it would mean that the French state won’t have more than [a] 41.67% stake [in] Chantiers de l’Atlantique.”  

As he continues, this change would be particularly significant when comparing the two companies’ turnovers in 2018. “In that year, Chantiers de l’Atlantique registered a turnover of €1.5bn, while on the other hand, Fincantieri’s turnover was about €5m,” he explains. 

“This is key information to analyse the financial operation, which at the moment is undergoing extensive review by the European Commission,” states Touati, “and if successful, will make the French state a minority shareholder.”

“The Commission has identified high barriers to entry in this market, related to the very complex nature of cruise shipbuilding,” a European Commission press release read. “Cruise shipbuilding requires, in particular, specific infrastructure, established engineering and design capabilities as well as important project management skills to coordinate hundreds of suppliers and sub-contractors all along the construction process.”

While Chantiers de l’Atlantique has so far remained silent on the issue, Fincantieri issued a statement prior to the launch of the EC’s investigation. “Fincantieri expresses its firm disapproval of such decision, if confirmed, particularly in case it was based on the alleged reduction of the European players from three to two,” the Italian shipbuilder said.

“Following the transaction, there would still be three cruise shipbuilders in Europe, as opposed to the current four.”

With the European Commission just two months away from announcing its decision, opinions remain divided. 

Among the loudest opponents to the deal is French trade union Force Ouvriere, which represents employees at Chantiers de l’Atlantique’s shipyard in Saint-Nazaire, on the west coast of France. 

Commenting on the EC’s investigation in October, the union argued in a blogpost that the transaction would make the shipyard lose its authority and governance, with potentially negative consequences on direct employment and subcontracting. 

“Our yard has the ability to land orders without being backed by a large group and the ability to finance them at more attractive rates than those enjoyed by Fincantieri,” the post added. 

In the aftermath of the first announcement, Commissioner Margrethe Vestager, who oversees competition policy, said: “Demand for cruise ships is booming globally. Chantiers de l'Atlantique and Fincantieri are two global leaders in this sector. This is why we will carefully assess whether the proposed transaction would negatively affect competition in the construction of cruise ships to the detriment of the millions of Europeans taking cruise holidays every year.”

Preliminary conclusions have already identified the transaction as unable to meet the turnover thresholds of the EU Merger Regulation, as well as potentially damaging for a continent that is already struggling with capacity constraints.

“In the shipbuilding industry, we [Europe] are already losing our lead on almost all fronts,” Massimiliano Salini, a member of the European People's Party, told Business Insider Italy. “China and South Korea are now ahead of us in fields ranging from submarines to motorboats, but we remain a leader in cruise shipbuilding. […] This temporary block is weakening us and damaging us especially from a manufacturing point of view.”

Echoing his words, Arnaud Touati believes that creating one or two “European champions” – instead of remaining more locally fragmented – would make the continent more competitive against American and Asian shipyards. 

“We should have one or two European shipbuilding candidates that are much stronger and more powerful,” he claims. “There are shipyards all over Europe, from France to Germany to Belgium and Italy, which being so small, will never try and impose themselves at an international level.

“As a result, I think that the EC is lacking a global vision, and has failed to understand that it should spend more time supporting the formation of these European groups instead of trying to make sure that there are small regional actors that have no market confidence.”