September 27, 2017 / 9:30 AM / 2 years ago

France, Italy strike deal on STX France shipyards

The logo of STX is seen during a press conference at the STX Les Chantiers de l'Atlantique shipyard site in Saint-Nazaire, western France, western France, January 4, 2017. REUTERS/Stephane Mahe

PARIS (Reuters) - France and Italy agreed a deal on Wednesday giving Italy’s Fincantieri (FCT.MI) effective control over French shipbuilding firm STX France under shared ownership and strict conditions, ending a dispute that had soured bilateral relations.

The two countries also announced their intention to study, by June 2018, a possible merger of French military shipyards company Naval Group with Fincantieri, the French Presidency said, confirming a Reuters report.

Under Wednesday’s agreement, Fincantieri will take 50 percent of STX, the French state 34.34 percent, Naval Group 10 percent, STX staff 2 percent and STX local suppliers 3.66 percent.

In order for STX to get effective control at 51 percent, the French state will lend it a one percent stake.

Paris has, however, a right to demand back that 1 percent stake if Fincantieri does not honor commitments on employment, governance or intellectual property.

Naval Group, formerly DCNS, designs and produces France’s submarines and surface ships. The company is owned by the French state while French defense company Thales (TCFP.PA) owns a 35 percent stake in the company.

France had angered Italy by ordering a “temporary” nationalization of STX, cancelling a deal in which Fincantieri and another Italian investor had agreed to buy 55 percent.

Reporting by Jean-Baptiste Vey, Gwenaelle Barzic, Writing by Dominique Vidalon; Editing by Richard Lough

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