October 29, 2019 / 2:49 PM / 17 days ago

Fincantieri's French shipyard bid faces lengthy EU antitrust probe: sources

BRUSSELS/MILAN (Reuters) - Europe’s largest shipyard Fincantieri (FCT.MI) faces a full-scale EU antitrust investigation into its bid for France’s Chantiers de l’Atlantique on concerns the deal would reduce competition, three people familiar with the matter said.

FILE PHOTO: Royal Caribbean Cruise Limited (RCCL) "Symphony of the Seas" ship leaves the STX Les Chantiers de l'Atlantique shipyard site in Saint-Nazaire, France, March 24, 2018. REUTERS/Stephane Mahe/File Photo

The European Commission’s preliminary review of the deal ends on Wednesday. It will follow up with an in-depth investigation, the sources said. This lasts 90 working days but could stretch to as long as five months.

The EU competition enforcer is worried the number of European players will be cut to two from three as a result of the deal, the sources said. The other competitor is a German shipyard.

Fincantieri has argued Asian shipyards could pose strong competition in the next decade to try to address the Commission’s worries, the people said. However this is not sufficient and it may have to offer concessions, they added.

Fincantieri shares gave up gains of 0.7% to trade 1% down following the Reuters report. They subsequently recovered ground and were 0.6 percent up at 1503 GMT. The Italian state holds a majority stake in the company.

The Commission declined to comment.

Earlier this year, it said the deal, in which Fincantieri will acquire a 50 percent stake in Chantiers from the French state, could significantly harm competition in shipbuilding, in particular the global cruise ship market.

France also agreed to lend a 1% stake to Fincantieri to allow it to take effective control on condition the company makes commitments on jobs, governance and intellectual property.

Based in Saint-Nazaire in western France, Chantiers was previously called STX France. The Saint-Nazaire yard is the only one big enough in France to build aircraft carriers and other large warships, making it a strategic national asset.

“We do not comment on rumors,” a spokesman for the French economy ministry said.

Reporting by Foo Yun Chee in Brussels and Francesca Landini in Milan; Additional reporting by Gwenaelle Barzic in Paris; Editing by Mark Potter

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