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« The control of foreign investments can constitute a brake on the attractiveness of the territory »

Tribune. At the end of November 2021, the Minister of the Economy and Finance announced the extension for one year of the lowering of the threshold for equity participation in listed sensitive companies requiring prior authorization, this holding threshold being 10% (at the instead of 25%) of the voting rights.

Crossing this threshold has triggered the control of foreign investments in France (IEF) since July 22, 2020. Around the same time, the Ministry of the Economy had also extended, on a permanent basis, IEF control to the biotechnology sector.

If this reinforced capacity to control foreign investments makes it possible to preserve strategic assets for our economic and technological sovereignty, this reform imbued with protectionism is however debated.

Brought up to date in 2005 by the government of Dominique de Villepin, in the context of a rumor of a hostile takeover by PepsiCo on Danone, the protection of French companies has been significantly strengthened over the past three years.

Threshold lowered from 33% to 25%

The Pacte law (Action plan for the growth and transformation of companies) in 2019, then a decree of December 31, 2019 strengthening the powers of the Minister of the Economy within the framework of the procedure for controlling foreign investments have come to extend the field of application and strengthen the system.

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These two texts alone have lowered from 33% to 25% the participation threshold triggering the control of foreign investments in France and extended the powers of the Minister in the event of violation of the notification obligation. In this context, Bruno Le Maire, in January 2021, was thus able simply to suggest that he could veto the proposed takeover of Carrefour by the Canadian distributor Couche-Tard, by invoking the protection of the “food sovereignty”, for the project to be abandoned.

The health crisis has increased the need to safeguard sensitive and strategic industries against potential takeovers by foreign investors. From telecoms, to the aerospace sector, to the defense and energy sectors, via biotechnologies, foreign investments made in national flagships are increasingly scrutinized by Bercy. But at what cost ?

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Thus, while in 2020 the number of foreign investments in France decreased sharply due to the crisis, controls have increased, with in particular reinforced controls on the defense sector but also increasingly in the biotechnology sector.

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