France Tightens Foreign Investment Scrutiny Amid Geopolitical Tensions

France has tightened controls on foreign investment in strategic companies, lowering the ownership threshold that triggers government scrutiny from 25 per cent to 10 per cent, according to local media reports on Monday.

Prime Minister Sébastien Lecornu signed a decree published on Sunday (2 August) aimed at strengthening state oversight of acquisitions by foreign investors in sectors deemed sensitive, according to the television channel BFMTV.

Under the new rules, non-European investors seeking to acquire at least 10 per cent of voting rights in listed French companies operating in strategic sectors will face review by the Ministry of Economy.

Previously, government scrutiny was triggered when such investors acquired 25 per cent or more of shares.

The measure aims to “continue protecting key businesses and technologies for the security” of France, the Prime Minister’s office said.

“In a geopolitical context marked by strong tensions,” the government wants to protect France from “opportunistic non-European shareholdings” in listed companies that could pose a threat to national security, it added.

The enhanced oversight will be carried out through an accelerated procedure to avoid unnecessary restrictions on companies’ ability to raise capital in financial markets.

Foreign investors will be required to notify the Directorate General of the Treasury. Once a complete application is received, the economy minister will have 10 days to decide whether the proposed transaction requires further examination.

The decree follows a parliamentary report submitted to Lecornu on 20 July calling for a “radical change of approach” to strengthen France’s economic security amid rising geopolitical risks.

Source: Anadolu