Italian, French shipbuilding majors sign joint venture agreement

Italy’s Fincantieri and France’s Naval Group last week signed the “Alliance Cooperation Agreement”, setting the stage for the creation of a 50/50 owned joint venture.

Based on the agreement, the joint venture company will be headquartered in Genoa with a subsidiary in Ollioules, France.

The agreement follows the approval by the boards of directors of the two companies and is part of the EU-funded “Poseidon” project.

It also paves the way towards a broader alliance aimed at reinforcing their military naval cooperation for creating a more efficient and competitive European shipbuilding industry.

The agreement has been signed by the CEOs of the two companies, Giuseppe Bono and Hervé Guillou, on board of Italian frigate Federico Martinengo, moored at the Naval Base of the Italian Navy in La Spezia.

The incorporation of the JV, expected in the coming months and in any case before the end of the year, will be subject to customary conditions for this kind of transactions and to obtaining the necessary authorizations from the relevant authorities.

Through the joint venture, Fincantieri and Naval Group will share best practices between the two companies, jointly conduct selected research and development activities, optimize procurement processes, jointly prepare offers for binational programs and export markets.

The governance of the JV, as regulated in a shareholders’ agreement, envisages a Board of Directors of 6 members, 3 appointed by each company.

For the first three-year term, Fincantieri will appoint the Chairman and the Chief Operational Officer, while Naval Group will appoint the Chief Executive Officer and the Chief Financial Officer.

“We are very satisfied with the results achieved and, above all, we would like to thank our governments which in the last few months have worked side-by-side with us, and continue to do so, with the aim of finalizing an agreement that will ensure the protection of sovereign assets while promoting cooperation between the two teams,” Giuseppe Bono and Hervé Guillou stated.

“This commitment will allow us to better serve our Navies, provide the appropriate support for common export operations and effectively lay the foundations for the consolidation of the European defense industry.”