France tightens foreign investment controls in sensitive sectors

France is intensifying its scrutiny of foreign investments from outside the European Union into French companies operating in sensitive sectors. The government announced new measures designed to enhance national security in response to escalating geopolitical tensions.

Prime Minister Sébastien Lecornu issued a decree mandating that any investor from outside the EU seeking to acquire 10% or more of a French company's shares must obtain prior government approval. This applies whether the company is listed on French or foreign stock exchanges.

This new regulation significantly lowers the threshold for government scrutiny. Previously, such oversight was triggered when a new investor acquired 25% of a company's voting rights. The French government stated that the measure is intended to curb "opportunistic acquisitions" by non-EU entities that could threaten France's strategic interests and national security.

The government emphasized that the decision comes amid a global climate of heightened geopolitical tensions and aims to safeguard companies and technologies vital to French security. However, the Ministry of Finance will review requests within ten days to determine if a deeper review is necessary or if the transaction can proceed without additional measures, ensuring that the ability to attract market funding is not unduly hindered.

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Opportunistic acquisitions