Affected by the novel coronavirus epidemic, Italy Fincantieri group failed to submit the required information in time. The EU antitrust regulator has suspended the merger review of the two major European cruise construction giants, Italy Fincantieri and Chantiers de l Atlantique, the Atlantic.
Previously, the European Commission was scheduled to rule on the case on April 17. However, the Commission's website shows that the investigation was suspended on March 13.
"If the two sides fail to provide the important information requested by the European Commission in a timely manner, a consolidated investigation process will be initiated," said Commission spokesman Arianna Podesta However, the "novel coronavirus epidemic" has led to the current challenging environment, which may have affected the ability of enterprises to provide information in a timely manner.
According to the original plan, Fincantieri had to make concessions on March 15 to address EU concerns. In general, companies may have to sell assets or transfer key technologies to competitors. However, as the Italian epidemic continued to escalate, Fincantieri announced on March 16 that all its shipyards in Italy would be shut down for two weeks until March 25.
If Fincantieri does not give in, the merger could be difficult to get approval from the European Commission. Fincantieri hopes that the heavy blow to Italy will weaken the hard line of the European Commission to some extent.
Driven by the French and Italian governments, Fincantieri reached an agreement in September 2017 to gain effective control of the Atlantic shipyard. The Italian government wants the deal to help Fincantieri, Europe's largest shipbuilding group, fend off growing competition from Asia and elsewhere.
Nevertheless, the European Commission believes that in such a highly concentrated market with limited production capacity, the acquisition agreement between the two global leaders may push up cruise prices. The European Commission announced on October 30 last year that it would begin an antitrust investigation into Fincantieri's acquisition of the Atlantic shipyard.
According to EU regulators, Fincantieri's acquisition of Atlantic shipyard will reduce the number of competitors in European cruise construction market from three to only two, seriously affecting the competition within the EU.
According to the data, at present, Fincantieri's orders account for about 37% of the total global orders (based on gross tonnage), while Atlantic shipyards account for 21%. As a result, once combined, the share of both parties will reach nearly 59%. By contrast, its main competitor, Meyer werft shipyard in Germany, accounted for about 28.8% of the orders.