France tightens oversight of foreign investment to protect nation
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France Increases Oversight on Foreign Investment in Sensitive Sectors
New Decree Strengthens Foreign Investment Rules in France
By Dominique Patton
PARIS, Aug 2 (Reuters) – French Prime Minister Sebastien Lecornu issued a decree on Sunday to strengthen oversight of non-European investment in French companies to protect national security.
Key Provisions of the Decree
Lowered Investment Thresholds
• An acquisition of 10% or more of the shares of a publicly traded French company operating in a sensitive sector by a non-European investor will now require government authorisation, the decree said, regardless of whether the company is listed in France or abroad
Previous Screening Requirements
• Screening previously applied when 25% of voting rights in a French company changed hands
Rationale Behind the Changes
• The threshold is being lowered “to guard against opportunistic, non-European equity acquisitions in French companies listed outside the EU that could pose threats to national security”, the decree said
• The move occurs amid significant geopolitical tensions, the decree added, and would ensure protection of companies and technologies critical to French security
Implementation and Review Process
Government Review Timelines
• To avoid hindering companies’ ability to raise capital on markets, the finance ministry will be required to issue a decision within 10 days of an application on whether a transaction requires an in-depth review
Effective Date
• The new rules enter into force later this month
(Reporting by Dominique Patton; Editing by Paul Simao)
