Fincantieri has been given one month to keep alive its bid to take over Chantiers de l’Atlantique.
The deadline for the takeover by the Italian shipbuilder was due to expire on 31 December.
The French government and the state-owned Italian shipowner have now agreed to an extension of one month.
The deal has already been postponed on previous occasions, most recently due to the coronavirus.
But the latest delay is necessary so that the shipbuilder can respond to competition concerns raised by the European Commission, according to French and Italian sources.
Four years in the making
Fincantieri proposed the acquisition of 50% of the French yard in 2017, but the deal has yet to receive European antitrust approval.
The blueprint included that an additional 1% would be loaned by the French state, which reserved the right to take it back if the Italian group did not respect its commitments.
The merger was proposed following the financial problems of Chantiers' former owner, South Korea's STX Offshore & Shipbuilding.
But the potentially dominant position that the pair could hold in cruiseship construction has been a concern for competition authorities in Brussels.
The combined orderbook of the two yards could command more than half of the cruiseship newbuilding market.
Fincantieri holds 37% of cruiseships currently on order on a gt basis, while Saint-Nazaire-based Chantiers has a further 21%.
The other large cruiseship builder is Germany’s Meyer Werft, which, together with its Turku yard in Finland, has a 28% share of the world market.
Capital increase?
The cruise industry has been particularly hard hit by the pandemic.
This has fuelled speculation the Italian shipbuilder is preparing a big capital increase to cope with the coronavirus crisis that has hit its customers in the cruise industry.
Fincantieri, which has a market capitalisation of about €1bn ($1.25bn), is considering a capital increase of up to €1.5bn, according to Bloomberg News.
The shipbuilder's share price has halved in the past 12 months and is trading at about €0.56.
Fincantieri has agreed to postpone some cruiseship deliveries in recent months to avoid cancelling previously acquired orders as a result of the impact of coronavirus on the cruise industry.
To weather the difficulties, Fincantieri borrowed €1.15bn from a group of banks tapping a guarantee provided by the state as part of emergency measures against the pandemic.
