France’s Dilemma: Attracting Foreign Investment while Protecting Strategic Companies

Certain French companies in sectors such as defense, transport, cybersecurity, space, and health are considered strategic by the State. According to a recent report on foreign investment control obtained by Les Échos, Paris authorized the takeover of 135 “sensitive” companies compared to 131 the previous year. The challenge for Bercy is to strike the right balance between attracting foreign investments to France and protecting its interests.

As the Minister of Economy, Bruno Le Maire declared that France remains fully committed to mobilizing all necessary levers to protect businesses vital to national life while maintaining an openness to foreign investment. However, parliamentarians from opposition have pushed for an increasingly significant role for Parliament in these controls. Last year, 309 files were submitted with investment requests primarily from the United States, the United Kingdom, and Canada.

Bercy can reject a file by imposing provisions on investors such as maintaining the headquarters in France and preserving jobs. The Ministry of Economy and Finance notably vetoed American Flowserve’s purchase of French strategic assets Velan last year. As digital giant Atos prepares for takeover, the government seeks to isolate “strategic” assets beforehand. Servier laboratories have announced that they want to sell Biogaran, a French leader in generics drugs, and the government is closely monitoring the process to ensure national interests are protected.

In conclusion, France faces a delicate balance between attracting foreign investment while protecting its strategic companies’ interests. The Ministry of Economy has been successful in vetoing certain acquisitions but must continue its efforts to safeguard national business essentials while remaining open-minded about foreign investment opportunities.