France Tightens the Gate on Foreign Capital
Synopsis
New rules require government approval for non-European investors acquiring 10% or more of listed companies in sensitive sectors.
Key Highlights
- France has increased the threshold for government review of foreign investments in sensitive sectors.
- Non-European investors acquiring 10% or more of certain French companies will now need government approval.
- The new rules will take effect later this month.
France has introduced stricter rules on foreign investment, with Prime Minister Sebastien Lecornu issuing a decree to strengthen government oversight of non-European investments in French companies deemed important to national security.
Under the new framework, any non-European investor seeking to acquire 10% or more of a publicly listed French company operating in a sensitive sector must first receive government approval, regardless of whether the company is listed in France or overseas.
Previously, government scrutiny only applied when an investor acquired 25% of the voting rights in a French company.
Faster Review Process
The French government said lowering the review threshold is designed to prevent opportunistic takeovers of strategically important French companies by non-European investors, particularly those listed outside the European Union.
According to the decree, the changes reflect heightened geopolitical tensions and aim to safeguard businesses and technologies considered critical to France’s national security.
To minimise delays for companies accessing capital markets, the finance ministry will have 10 days to determine whether a proposed investment requires a more detailed review. The new rules are scheduled to come into force later this month.
Source; Reuters
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