A proposed merger between Fincantieri, the listed Italian shipbuilder in which the government holds a majority stake, and the French state controlled Chantiers de l’ Atlantique shipbuilder has fallen through, the finance ministries of France and Italy said in a joint statement.

The merger was first initiated in 2018 and the final deadline to complete was set for 31 January 2021.

The European Commission had expressed reservations about the plan on the note that it could reduce competition in the cruise ship building sector as both companies are major actors in this area. In October 2019, it decided to launch an inquiry into the proposed merger and its potential effects.

The stance of the commission and  uncertainty in the outlook for the tourism sector as a result of the Covid-19 pandemic, so that the current economic context does not allow the continuation of the merger, the two ministries said.