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STX Chantiers de l'Atlantique, Saint-Nazaire

Italy and France reached a deal 28 September 2017 on Italian shipbuilding group Fincantieri's takeover of the French STX shipyards. Fincantieri will have a 50% stake in the Saint Nazaire shipyard plus an additional 1% loaned to it by the French state for 12 years in the deal reached before the Italian-French summit in Lyon. France can take back the 1% if Fincantieri does not comply with the deal during those 12 years, they said. If Paris takes back the 1%, Fincantieri will have the option of selling the 50%, Rome government sources said.

The deal, which also envisages military cooperation by the end of next year, was ratified at a Lyon summit where French President Emmanuel Macron and Italian Premier Paolo Gentiloni were expected to see eye-to-eye on collaborating to construct a new Europe. The ownership of STX is now thus constituted: 50% Fincantieri, 34.34% French State, 10% Naval Group, 3,66% local companies, 2% workers. The board is made up thus: 8 members, of whom 4 from Fincantieri, 2 from the French State, one representing workers and one the Naval Group.

On 08 January 2019 the European Commission agreed to the request submitted by France and Germany asking it to look at Fincantieri's proposed acquisition of Chantiers de l'Atlantique in the light of the EU Merger Regulation. The Commission considered that the transaction could harm competition at European and global level. The proposed acquisition of Chantiers de l'Atlantique by Fincantieri did not reach the turnover thresholds set by the EU Merger Regulation for transactions notifiable to the European Commission because of their European dimension. However, the plan was notified for authorisation in France and Germany.

France submitted a referral request pursuant to Article 22(1) of the EU Merger Regulation. This provision allows Member States to request that the Commission examine a concentration that does not have an EU dimension but affects trade within the single market and threatens to significantly affect competition within the territory of the Member States making the request. Germany joined the referral request submitted by France.

On the basis of the information provided by France and Germany, and without prejudice to the outcome of its exhaustive investigation, the Commission considered that the transaction could significantly harm competition in shipbuilding, in particular in the global cruise ship market. The Commission also concluded that it was best placed to examine the potential cross-border effects of the transaction. Therefore the acquisition of Chantiers de l'Atlantique by Fincantieri will be fully examined by the Commission.

STX Corporation

Previously owned at 66.6% by STX Europe – itself a 100% owned subsidiary of the Korean STX Business Group – and at 33,3% by the French state (via a strategic investment fund), STX France SA is a builder of high added value ships. The company runs three subsidiaries with diverse and complementary activities : STX France Lorient, STX France Solutions and STX France Cabins. With a continuous progress strategy allowing it to integrate new economical constraints and a highly proactive R&D policy, STX France established itself as a major player on the international shipbuilding market, whilst initiating a dynamic diversification strategy.

STX Europe was an international shipbuilding group with 15 shipyards in Finland, France, Norway, Brazil, Romania and Vietnam. STX Europe comprised 6 shipyards in Finland, France and Norway in addition to 9 shipyards belonging to STX OSV Holdings Limited. Other operations include units for development and sale of arctic technologies, design of cabins, project management and ship design. STX Europe had approximately 14,000 employees. STX Europe AS, a subsidiary of the South Korean industrial chaebol STX Corporation, was the largest shipbuilding group in Europe, with a world leading position in the production of cruise ships, ferries, offshore and other specialised vessels. Renowned for its ability to develop innovative solutions tailor-made to customers’ needs, STX Europe drew on experience from centuries of design and production of advanced vessels.

Providing both standardised and customised vessels, STX Europe works in close cooperation with the world’s leading ship owners. The right new building concept and the right price, delivered on time and within budget, is vital to customers’ success and therefore crucial to STX Europe’s results.

Chantiers de l'Atlantique

Chantiers de l'Atlantique, one of the world's largest shipyards, based in Saint-Nazaire, France. Chantiers de l'Atlantique was founded in 1861 by Compagnie Générale Transatlantique. STX Europe's principal shareholder is the Korean based international industrial group STX Business Group which has approximately 54, 000 employees and aims to be a global top player in its core areas: shipping and trade, shipbuilding and machinery, plant and construction, and energy. The French Government acquired a blocking minority holding in STX France after the STX takeover in 2008.

Since 1984 Chantiers de l'Atlantique was part of the company ALSTOM, whose maritime arm it formed ALSTOM Leroux Naval. ALSTOM, through its subsidiary Chantiers de l'Atlantique and ALSTOM Leroux Naval (a subsidiary of Chantiers de l'Atlantique), is one of the world's leaders in the field of high added value shipbuilding. Chantiers de l'Atlantique offers a wide range of vessels: Cruise liners; Car-Ferries; RO-RO; LNG Tankers; High-Speed Ferries; Warships and other Military Vessels, Specialised Projects, etc.

In January 2006 Alstom, the builder of the Queen Mary 2 cruise liner, sold its unprofitable shipbuilding business to Aker Yards of Norway on Wednesday, ending 20 years of involvement in ocean liners as it moved to avoid financial turmoil. The two groups said they would set up a joint firm to control the yards and that Aker would pay Alstom E50 million, or $60 million, for a 75 percent stake. Alstom said it would inject E350 million into the new shipyard firm. Aker Yards was an international shipbuilding group focusing on complex and sophisticated vessels and is one of Europe's largest, and as of 2006 among the world's five largest shipbuilders.

Aker Yards would own 75% of this new company and ALSTOM would commit itself to keep the remaining 25% until 2010. The transaction would enable continuity in management and the actions taken as part of the “Marine 2010“ performance improvement and cost reduction programme already under implementation in ALSTOM Marine. The transaction would have no direct impact on employment. By being part of Aker Yards, the new company would benefit from a broadened product range and strong industrial synergies. Aker Yards has 13 yards in 5 countries in which it has demonstrated its ability to implement synergies. It would be in a position to address the strong growth which is expected in this market.

The new company would benefit from a unique design competence, combining the long tradition of French and Finnish cruise shipbuilding, that has produced icons such as SS France, Queen Mary 2, the Voyager class and the Freedom class ships. Aker Yards would also be in a position to fully leverage Chantiers de l’Atlantique's large industrial capacity in cruise ships and naval vessels in Saint-Nazaire. The shipyard is ideally positioned to handle the construction of very large ships and is able to respond to a cruise market which demands vessels of ever-increasing size.

The yard's history began with the marine industrialization in France in the middle 19th Century. At this time Saint Nazaire was incorporated on 18 July 1840 as main port of the line to South America, which was confirmed by decrees of 1857 and 1858, under which the postal line of the Antilles et Mexique de l'Compagnie Transatlantique was created. The "Compagnie Générale Transatlantique" (Transatlantic General Shipping Company) was created in 1861. At that time however the technical knowledge for the building of modern metal ships was missing completely in France. Napoleon III was therefore obligated in April 1862 to purchse from England three packet ships, and the shipping line opened 14 April 1862. In parallel the yard in Saint Nazaire was created.

The technical knowledge was imported from Great Britain, which had built 1857 the Great Eastern, a ship made of metal with a length of 230 meters. John Scott, left thet yard in Greenock and brought these techniques to France. On 24 April 1864 the first ship of the Chantiers Scott was launched. This was that 108 m long packet ship Eugnie. But the euphoria lasted only briefly: in 1866 the yard, with 1,800 workers, went into bankruptcy. Some 13 years later, in 1882 yard was opened again.

The Great War marked the first major evolution. The site involved in the war effort, implementing new modes of operation with the integration of Taylorism and the diversification of production (guns, tanks... manufacturing tubes) to advance the techniques related to metallurgy. Although the period between the wars saw episodes of prosperity but also crises. It is also in this period that the modernization and innovation policy is bearing fruit with the constructions dry in the form Jean Bart and the establishment of enormous progress in terms of energy. In the years 1929 to 1934 the dry dock forms Joubert was built, with a length of 350 meters and width of 50 meters, one of the largest dry docks of the world.

It is especially marked by the quest for the Blue Ribbon (the award created by the 19th century shipping companies given the fastest ships in the world on the transatlantic route between England and North America). This quest was a real challenge for the industry that produces ships where luxury and technology are the master-word.

The French turbo-electric, quadruple screw liner Normandie was laid down on 26 January 1931 at St. Nazaire, France, by the Societe Anonyme des Chantier et Ateliers de Saint-Nazaire (Penhoet) for the Compagnie General Transatlantique (French Line); launched on 29 October 1932; christened by Madame Andre Lebrun, wife of the President of the French Republic, and completed her first Atlantic crossing, arriving in New York City on 3 June 1935, winning the coveted Blue Riband. Eventually, however, looming hostilities in Europe compelled Normandie to seek haven in New York harbor, where the U.S. government interned her on 3 September 1939, two days after Germany invaded Poland.

During the Second World War, Saint-Nazaire represented a threat to the Allied Forces. As a result of the Allied bombing campaign against Nazi submarine bases during the Second World War, the cities of Brest, Lorient, and Saint Nazaire were almost completely destroyed. Despite thousands of bombingmissions, all three submarine bunkers still stand today. In Saint Nazaire, the incendiary bombings of 1942 and 1943, destroyed eighty percent of the entire city. In the early days of the Battle of the Atlantic, Saint Nazaire possessed one of the only dry docks on the west coast of France large enough to hold the German battleships Bismarck and Tirpitz. The docks and lock system presented a tremendous target of opportunity for the British to effectively reduce Nazi naval activity in the near future.

RAF bombers attacked the docks and the large lock system twice during the early months of 1941, but caused more damage to the city than on the actual designated targets. This was mostly due to poor weather conditions this time of year and the aircrews inability to acquire the targets. Unsatisfied with their efforts, Bomber Command decided to execute a daring alternative plan to destroy the locks.

One of the most famous of raids on Saint Nazaire, codenamed Operation CHARIOT, took place on March 27, 1942. This was a combined British operation consisting of bombers anda commando raiding party designed to put the large lock system out of commission. Sixty bombers were tasked to provide air support for this mission. The bombers attacked during nighttime on the 27th and 28th of March as a diversionary tactic to allow the seaborne attackingforce to come ashore aboard the HMS Cambletown. British commandos rigged the Cambletown with delayed explosives, rammed the lock during the early morning hours and detonated thecharges, destroying the lock by noon. The raid was deemed a success, but many British commandos lost their lives. The British were unable to capitalize on the moment. They ceased bomber operations against U-boat bases for a majority of 1942 as they began re-focused efforts on transforming Bomber Command into an effective fighting force and planning the first 1,000-plane raid over Germany.

Despite the obvious destruction caused by Operation CHARIOT and the additional bombing raids throughout the year, there is no evidence to suggest that any of thesemissions hindered Nazi U-boat operations. Saint Nazaire was repeatedly attacked from January to June 1943, as a result of directive and policy changes established by the Casablanca Conference. Because of the conference and afocus on U-boat bases, it would sustain its heaviest amount of bombing throughout the entire duration of the war.

These intensive strikes caused the destruction of about half of the industrial infrastructure. At a result of the war, the French State funded much of the reconstruction of the industrial fabric. This new breath allowed the modernization of the site which must deal with the commands of the authorities for the reconstruction of civil but also commercial fleet.

From the beginning of the 1950s, the orders from the government ceased. At the same time, a new economic deal loomed with the internationalization of the market. French sites appear as non-competitive in the face of new construction centers. A reorganization of shipbuilding became indispensable with for words of order: competitiveness, series production for cargo ships and integration of new technologies to reduce the construction time. By 1955, building activity is again flourishing, including the construction of ships, mixed ships, cargo ships and oil. As early as 1956, the construction of the passenger liner France occupied the front of the stage. A ship of exceptional size, she necessitated 62 months of work, and was inaugurated in 1960 by General de Gaulle.

The aircraft carrier Foch was launched in 1960. In the early 1960s, shipbuilding faced a new situation, with the disappearance of order for military vessels, while oil tankers and LNG carriers - new gigantic ships - were appearing on the market. At the same time, the international competition was becoming stronger, with Japan taking a prominent place. Saint-Nazaire witnessed the establishment of important structural investment plans to create a "new construction" capacity. These transformations allowed, through a better use of space, completing the construction of several ships at the same time, inaugurating the era of prefabrication. The automation of services was also in the market with the first numerical control machines, plotters and the implementation of scheduling.

In the 1970s, the closure of the Suez Canal made necessary the construction of supertankers. Thus with the Chantiers de a l'Atlantique further basin was put on: basin C chould actually serve for the building of 1.000.000 tdw tankers, but the tanker crisis under the reopening of the Suez channel made it redundant. This basin serves today for the completion work on ships. The yard has the largest dry dock in France, dry dock B, with a length of 415 meters and to width of 66 meters.

The basin was able to accommodate tankers of 1 million tons, allowing the Saint-Nazaire site to build for the Shell company between 1976 and 1979, the four largest tankers in the world (Prairial, Batillus, Bellamya, Pierre Guillaumat).In a difficult economic context, the direction of the residents of Saint-Nazaire shipyard prepared for its entry in the stock market (June 1974) and work for the creation of industrial partnerships, organized on the Japanese model. In October 1976, or two months after the start of the negotiations, the Chantiers de l'Atlantique-ALSTHOM merger was effective, giving birth to the ALSTHOM Atlantic group.

Shipbuilding continued to suffer competition and the cyclical nature of the business. The leaders of the Saint-Nazaire shipyard nevertheless tried to return to the ambitious market of cruise ships. The return is initiated in 1980 with the command of two small ships of 600 cabins for Holland America Line, the Noordam and Nieuw Amsterdam. The great shift began in 1985 with the signing of the orer for the Sovereign of the Seas for Royal Caribbean Cruise Line. This contract represented a real challenge with a time of record construction for the time (29 months). With a perfectly controlled delivery, the message was clear: Saint-Nazaire was back on the market for ships. At the same time, the Saint-Nazaire shipyard, while now its activity of constructor of ships, signed in 1991 a spectacular order 5 LNG carriers for the Malaysian group Petronas, whose shipments were phased in from July 1994 to July 1997.

Despite a difficult economic environment and increased competition, the shipyard of Saint-Nazaire continued with the liners on the market. Thus it signed orders with the largest shipowners in the world. November 6, 2000, the yard was again thrown under the spotlight with the signing of the legendary Queen Mary 2 for Cunard Line. The yard, which had returned to the construction of transatlantic to the origin of its creation, booked with success the ship in December 2003.

In 2006, the Finnish New Aker Finyards and Alstom decide to join forces to create Aker Yards, a new world shipbuilding giant. After many stock market movements, the shares of the company were finally bought in 2008 by the South Korean Group STX Business Group, giving rise to STX Europe. Meanwhile, the French yard continued its activity on the market of the complex vessels (passenger vessels and military vessels) launching new markets linked particularly to energy marine renewable (TRA). It also offers technical solutions for specialized vessels.

The Mistral BPC (bâtiment de projection et de commandment) ship is the French Navy's 21,300t amphibious assault, command and power projection ships. The Mistral is armed with two MBDA France Simbad launchers for the Mistral air defence missile. The ships have been built by DCN in partnership with Thales and Chantiers de l'Atlantique. The hulls were built in three main sections. DCN constructed the hull center and aft sections at St Nazaire, Brest. Alstom Marine-Chantiers de l'Atlantique in Saint Nazaire constructed the forward section of the hull which was transferred to the DCN shipyard at Brest for assembly. DCN subcontracted Stocznia Remontowa in Gdansk to carry out construction and fitting for the center and aft sections.

Construction of the third Mistral-class helicopter carrier/amphibious assault vessel (known in French as "le Batiment de Projection et de Commandement - BPC") began in 2009 at the STX shipyard in Saint Nazaire, near Nantes in Northwestern France. While STX provided the "brawn" for the construction of this ship, French warship builder DCNS (Direction des Constructions Navales - Services) provided the "brains," i.e. the design and research specifications as well as engineering and weaponry that went into the first two ships built in the program: the Tonnerre (2005) and the Mistral (2006). The Mistral-class is the second largest type in the French navy. BPC3, the third ship in Mistral class, was expected to be completed in 2012. STX is specialized in cruise ship building. Although military shipbuilding was holding its own in the midst of the current economic downturn, orders for cruise ships had plummeted worldwide. STX had two cruise ships under construction and no other orders in sight. The BPC under construction only required 20 percent of the Saint Nazaire shipyard's production capacity. The yard was therefore desperate for more orders.

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Page last modified: 10-01-2019 17:20:49 ZULU