Italian shipbuilder Fincantieri has reached an agreement in principle with the French government on the acquisition of its rival company STX France.

“This agreement also confirms Fincantieri’s long-standing and fruitful collaboration in the naval segment with the French company DCNS. Fincantieri will continue to work with its counterparties to negotiate and conclude the final agreements,” the Italian shipbuilder said in a statement.

The comment was issued following the statements of the State Secretary for Industry of the French government, Christophe Sirugue, who confirmed the deal earlier today.

Under the deal, Fincantieri will acquire a 48 percent stake in STX France, while France will retain its 33 percent stake in the shipyard. Fondazione CR Trieste, will support the deal as an independent investor, taking up to 7 percent stake in the yard while DCNS would take the remaining 12 percent.

The Italian shipbuilder would stay a minority shareholder in the Saint-Nazaire company for at least eight years.

As part of the South Korean STX Offshore and Shipbuilding, the company was put up for sale after the financially troubled conglomerate decided to file for a court-led restructuring in May 2016. Initially, a controlling stake of 66.6 % of the French-based company was put up for sale and Fincantieri was selected as the preferred bidder for the French yard. However, as the unions opposed the privatization, a minority stake remained on sale.

If completed, the acquisition of STX France, which specializes in building cruise ships, is expected to boost Fincantieri’s position in the cruise segment.