The European Union is set to veto Italian shipbuilder Fincantieri's tie-up with France's Chantiers de l'Atlantique due to the difficulty of addressing competition concerns.
Sources familiar with the matter told Reuters that it is not clear what concessions Fincantieri can make to push through the takeover.
The Italian cruiseship specialist wants to add to its capacity to hold off competition from Asian rivals.
But regulators are concerned that a deal to acquire the former STX France would push up vessel prices in a concentrated market.
The report claimed that Fincantieri has until the end of this week to offer concessions.
These usually consist of asset sales or the transfer of technology to rivals.
But it is not clear what the Italian group could offer, or who the buyer would be.
The sources said Fincantieri hopes the impact of the coronavirus could soften the EU's stance.
Coronavirus hope?
“While waiting to receive official documents, the company is confident that the European Commission — in a moment in which we are heading toward an epochal economic crisis whose effects are still unknown — will take decisions that will allow the industries to better tackle these effects in order to reduce the impact which the crisis could have on employment,” a source close to the company told Reuters.
European Commissioner for Competition Margrethe Vestager said a decision is due next month.
Neither the EU nor Fincantieri is commenting.
TradeWinds has reported that the probe, launched last year, has highlighted differing views of rival shipbuilders — principally in Germany — about whether the forging of a cruise shipbuilding giant will protect or harm the European shipbuilding industry.
A combination of the Italian-French shipbuilding leviathan would be responsible for 59% of the global cruise orderbook.
Fincantieri holds 37% of cruiseship gross tonnage currently on order and Saint-Nazaire-based Chantiers has 21%.
Their main competitor is Germany’s Meyer Werft, the only other cruise shipbuilder of comparable size, with about 28.8%, according to the German Shipbuilding and Ocean Industries Association (VSM).
The Italian yard has had its eyes on Chantiers for at least a decade as it seeks to consolidate its position as the market leader in a booming cruiseship market.
Strip away its Norwegian shipbuilding unit Vard, which is currently undergoing a reorganisation, and the business is profitable for the Italian shipbuilder.
The company told TradeWinds in December that it was closing down two of its Vard shipyards in Norway due to a lack of work.
It is looking to sell Vard Aukra and Vard Brevik, with 200 workers facing redundancy in total.
