France nationalizing shipyard amid Italian takeover interest

The French government is temporarily nationalizing the country's emblematic Saint-Nazaire shipyard to prevent an Italian company from taking it over at the end of the week and to give France time to negotiate more guarantees in the case of an eventual deal.

The unexpected decision prompted anger in Italy, but French Economy Minister Bruno Le Maire insisted the move was temporary and that negotiations with the Italian state-owned group Fincantieri would continue. He said he was going to Rome on Tuesday for more talks.

The decision to nationalize the Saint-Nazaire shipyard on the Atlantic coast is the first major foray into the industrial sector for President Emmanuel Macron and runs counter to the free-market image Macron has sought to project.

Le Maire said the action was motivated by France's need to defend its strategic and military interests, to guarantee the preservation of thousands of jobs, and to ensure that French know-how is not transferred outside Europe.

Le Maire didn't use the word "nationalize" during his announcement, speaking only of the "right of pre-emption." But he did say that the French state now "will be a 100 percent shareholder" of the shipyard, which last year turned out the world's largest cruise ship, the Harmony of the Seas, and created the Queen Mary II.

The minister said nationalizing the shipyard would cost the French government 80 million euros ($93 million), but that the facility would not remain under state control permanently.

France's main goal is "to defend the strategic interests of France," Le Maire said, adding that the Saint-Nazaire shipyard is the only one in France capable of making hulls for military ships, including aircraft carriers.

France, trying to beat back a 10 percent unemployment rate, also wants to guarantee jobs for the shipyard workers on its soil.

Current orders mean there are job prospects for 11 years in Saint-Nazaire. But Le Maire said he wants to "strengthen" job guarantees in any sale in case there is a market reversal in the future.

The decision came only days before Fincantieri was supposed to take a majority stake in the shipyards.

The Italians have rejected a proposal that would have given France and Italy each 50 percent, with operational control being held by state-owned Fincantieri. But time was running out for Paris.

France held 33 percent of the shares in the shipyard, with a weekend deadline before Fincantieri bought it. The current majority owner, STX France, a subsidiary of South-Korean group STX Offshore & Shipbuilding, decided to sell the shipyard months ago. The Italian company made the only buyout offer.

Le Maire said the 50-50 French proposal is still on the table and that he thinks France and Italy will be able to find an agreement that works for both sides "in the coming weeks."

However, Italy slammed the French move. Economy Minister Pier Carlo Padoan and Economic Development Minister Carlo Calenda, in a joint statement Thursday evening, labeled as "grave and incomprehensible the French government's decision to not carry out already agreed upon accords."

They said they would meet with Le Maire on Tuesday in Rome, but warned that "nationalism and protectionism are not acceptable bases upon which to regulate relations between two great European nations."

Italian Foreign Minister Angelino Alfano said earlier that his country "doesn't accept ultimatums."

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Frances D'Emilio in Rome contributed to this report.