France’s Naval Group and Italy’s Fincantieri signed a joint venture agreement on June 14 that delineated the terms of incorporation for a new 50/50 owned company.

The companies signed an Alliance Cooperation Agreement on June 14 after both companies’ boards of directors approved what is being dubbed the “Poseidon project.”

According to the companies, this agreement “paves the way toward a broader alliance aimed at reinforcing their military naval cooperation for creating a more efficient and competitive European shipbuilding industry.”

A Bergamini-class Italian Navy FREMM frigate. (Photo: Fincantieri)
A Bergamini-class Italian Navy FREMM frigate. (Photo: Fincantieri)

Naval Group and Fincantieri’s respective governments own them as majority shareholders. In 2017, the French and Italian governments announced their intention to start discussions to establish a Fincantieri-Naval Group joint venture alliance. Then last October the companies said they planned to launch the alliance after submitting an alliance proposal to the respective defense ministers last July (Defense Daily, Oct. 24, 2018).

The latest step in the process was the signing of the agreement by Fincantieri President Giuseppe Bono and Naval Group President Hervé Guillou while aboard the Bergamini-class FREMM frigate Federico Martinengo (F 596) at the Italian naval base at La Spezia.

The FREMM vessels were designed jointly by Fincantieri and the Naval Group for use in the French and Italian navies.

“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. 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,” Bono and Guillou said in a statement.

The announcement said the joint venture incorporation is expected in the “coming months” before the end of the year.

The companies said they plan to share best practices, jointly conduct research and development activity, optimize procurement processes, and jointly prepare offers for binational programs and export markets in the joint venture.

They argued this alliance will be an opportunity for the companies and “their ecosystems to enhance their ability to better serve the French and Italian navies, to capture new export contracts, to develop new technologies and, ultimately, to improve the competitiveness of the naval sectors of both countries.”

The Poseidon project will be headquartered in Genoa, Italy and have a subsidiary in Ollioules, France. The joint venture’s governance structure, as structured in a shareholder’s agreement, plans for a six-member board of directors, with three from each company. In the first three-year term, Fincantieri will appoint the chairman and chief operating officer while the Naval Group will appoint the chief executive officer and chief financial officer.

Bono will serve as the chairman of the board while Guillou will serve as one of the other members.