The EU launched an investigation on the Fincantieri-STX transaction
Brussels is “concerned” about the possible limitation of competition: the Commission will decide by March 2020
Brussels is concerned that the Fincantieri-STX France transaction “could reduce competition in the cruise ship building global market”, therefore it will start an in-depth investigation whose outcome will by made official by March the 17th 2020.
The EU Commission waited until October the 30th to declare its decision about the transaction which should allow the Italian shipbuilding giant to take over the majority share of Saint-Nazaire Chantiers de l’Atlantique, notified to the DG Competition by the parties on November the 25th, following the request for a direct intervention of the EU antitrust authority made by France and Germany. In fact, since the deal does not exceed the minimum turnover thresholds resulting in the notification requirement, the EU antitrust authority had not been involved.
As recently anticipated by several press agencies, the Commission decided to start the in-depth investigation after a preliminary assessment, whose outcomes are “alarming”.
“The demand for cruise ships is increasing worldwide, and CdA and Fincantieri are two global leaders in this sector. For this reason, we want to determine whether the transaction can have a negative impact on competition in cruise ships building, to the detriment of million of Europeans who choose cruises for their holidays”, Competition Commissioner Margrethe Vestager explained.
The Commission pointed out that the in-depth investigation will not compromise the outcome of the procedure, but Brussels is worried about the possibility that, following the take over on Fincantieri’s part, CdA might “disappear” as a competitor from the cruise shipbuilding market, which is already very concentrated and very difficult to be accessed (the EU Antitrust authority referred to the need of specific infrastructures and high engineering, planning and project management expertise).
For these reasons, the Commission regards as “unlikely” the immediate entry in the market of new players which could counterbalance the possible negative effects of this transition, i.e. a limitation of competition which might result in higher prices, less choice and less incentives to innovation. According to the DG Comp, not even the shipyards’ major customers, i.e. international cruise companies, would have a sufficient bargaining power to oppose the possible increase of prices resulting from the transaction.
Therefore, the Commission will immediately launch an in-depth investigation which can last for a maximum of 90 working days. A final decision shall have to be taken and communicated by Brussels within next March the 17th.