France tightens oversight of foreign investment to protect national security

[PARIS] French Prime Minister Sebastien Lecornu issued a decree on Sunday (Aug 2) to strengthen oversight of non-European investment in French companies to protect national security.

An acquisition of 10 per cent 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.

Screening previously applied when 25 per cent of voting rights in a French company changed hands.

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.

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.

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The new rules enter into force later this month. REUTERS