PARIS (Reuters) – The French government will extend until 2021 a lower threshold for screening non-European investments in French listed companies that was put in place during the coronavirus crisis and was due to expire at the end of the year, a announced Friday the Ministry of Finance.
The government temporarily lowered in July the threshold above which investors from outside the European Union buying stakes in listed French companies must seek approval, to 10% from 25% previously.
“In this time of economic crisis, we must ensure the protection of our strategic companies. We will therefore maintain the 10% threshold for the screening of foreign investments in France, ”said Finance Minister Bruno Le Maire in a press release.
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.
The pro-business government of President Emmanuel Macron, which has also encouraged foreign investment, lowered the threshold for fear that market volatility resulting from the pandemic and a drop in the valuation of some French companies would expose them to takeovers. hostile.
Once the Treasury is notified of the intention to acquire a stake of more than 10%, it has 10 days to decide whether further examination is necessary. Such an examination may lead to the rejection of the agreement.
The government has rarely used its authority to block deals, although US conglomerate Teledyne this year abandoned 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 among European countries this year to step up the screening of investments from non-European countries that could lead foreign companies to take control of sensitive technologies.
Lawyers have said the measures will make mergers and acquisitions in Europe more complicated, and some activist US-based hedge funds have expressed frustration with the tougher measures.