PARIS (Reuters) - France and Italy will announce on Wednesday their intention to study a possible merger of French military shipyards company Naval Group with Italian shipbuilder Fincantieri (>> Fincantieri SpA), a source close to the French government told Reuters.

The idea would be to complete the study by June, 2018.

"It is confirmed. A deal will be announced. ..We have defined a method with a horizon, June 2018," the source said.

The announcement will be made by French President Emmanuel Macron and Italian Prime Minister Paolo Gentiloni after a Franco-Italian summit taking place in Lyon.

They will also say that Fincantieri will take effective control of STX France under shared ownership, ending a dispute that has soured bilateral relations, an Italian government source said.

Naval Group, formerly DCNS, designs and produces France's submarines and surface ships. The company is owned by the French state while French defence company Thales (>> Thales) owns a 35 percent stake in the company.

(Reporting by Jean-Baptiste Vey; Editing by Richard Lough)

Stocks treated in this article : Thales, Fincantieri SpA