Italy’s Fincantieri and France’s Naval Group said this week they will launch an alliance to incorporate a 50-50 joint venture to compete for European naval competitions.

The two companies are owned, via majority shareholders, by each country’s government. During the September 2017 Franco-Italian Summit, the French and Italian governments announced an intention to start discussions to establish a Fincantieri-Naval Group joint venture alliance in September 2017.

The French Horizon-class frigate FS Chevalier Paul (D621) (foreground) and U.S. Navy aircraft carrier USS John C. Stennis (CVN-74) (background) transit in the 5th Fleet area of responsibility in February 2013. (Photo: U.S. Navy).
The French Horizon-class frigate FS Chevalier Paul (D621) (foreground) and U.S. Navy aircraft carrier USS John C. Stennis (CVN-74) (background) transit in the 5th Fleet area of responsibility in February 2013. (Photo: U.S. Navy).

On Wednesday, the companies said they have worked “intensively” since then and in July submitted an alliance proposal to both countries’ defense ministers.  The proposals included an industrial project, its roadmap, and key initiatives they proposed to launch quickly. Now the companies announced they are ready to launch the alliance and are readying to incorporate a 50-50 joint venture.

The joint venture aims to be one step toward creating a longer-term alliance.

In a statement the companies said the joint venture is intended to “jointly prepare winning offers for binational programs and export market,” make a more efficient supply chain, conduct joint research and innovation work, and “encourage cross-fertilization between the two companies” by sharing test facilities and expertise.

Fincantieri and Naval Group underscored they consider the alliance an opportunity to not only better serve the Italian and French navies, but “capture new export contracts, to increase research funding and, ultimately, improve the competitiveness of both French and Italian naval sectors.”

Although the companies did not name any products under consideration to offer within the alliance, Fincantieri and the Naval Group said they are considering offering a common offer for the first studies for the Mid-Life Upgrade for the French and Italian Horizon-class frigates in 2019. That offer would use a common combat management system.

The companies are currently collaborating to provide four logistics support ships (LSS) to the French Navy, based on the Italian Vulcano-class LSS design.

The companies said the alliance requires a government-to-government agreement to ensure protection of sovereign assets, “fluid cooperation” between the national teams, and encourage more coherence on national assistance programs.

Last year the companies started talks to cooperate on a long term alliance after Fincantieri negotiated with France to purchase a controlling share in French shipyard STX France (Defense Daily, May 22, 2017).

France temporarily nationalized STX to prevent Fincantieri from getting a majority stake (Defense Daily, July 28, 2017).

Later Italy and France came to an agreement that allowed Fincantieri to buy a 50 percent share in STX while France lends it a one percent share to take control. The rest of STX’s ownership consists of 34.34 percent owned by France, 10 percent by the Naval Group, up to 2.4 percent by STX France employees, and up to 3.26 percent by local companies.