Foreign investments

EXCLUSIVE France extends stricter control of foreign investments until 2021

PARIS, Dec 18 (Reuters) – The French government will extend until 2021 a lower threshold for screening non-EU investments in listed French companies that was put in place during the coronavirus crisis and was due to expire at the end of the year. year, announced the Ministry of Finance. Friday.

The government temporarily lowered in July to 10% against 25% previously the threshold above which investors outside the European Union acquiring stakes in listed French companies must seek its approval.

“In this period of economic crisis, we must guarantee the protection of our strategic companies. We will therefore maintain the 10% threshold for screening foreign investments in France,” Finance Minister Bruno Le Maire said in a statement.

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The measure was due to expire at the end of this year, but the finance ministry said it would be extended until the end of 2021.

President Emmanuel Macron’s pro-business government, which has otherwise encouraged foreign investment, lowered the threshold over fears that market volatility resulting from the pandemic and a fall in the valuation of some French companies could expose them to takeovers. hostile.

Once the Treasury is informed of an intention to acquire a stake of more than 10%, it has 10 days to decide whether further examination is necessary. Such a review may lead to the rejection of the agreement.

The government has rarely used its authority to block deals, although US conglomerate Teledyne this year scrapped plans to buy French night vision company Photonis in the face of opposition from the French government.

The French measure is part of a wider campaign this year among European countries to strengthen the screening of investments from non-European countries that could lead foreign companies to take control of sensitive technologies.

Lawyers have said the measures would make it harder for mergers and acquisitions in Europe and some US-based activist hedge funds have expressed frustration with the tougher measures.

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Reporting by Leigh Thomas; Editing by Kirsten Donovan

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