FRANCE LAW AND PRACTICE Contributed by: Michael Doumet, François-Xavier Naime, Guillaume Nataf, Léna Sersiron, Eléonore d’Anthonay, Nella Picou, Pauline Celeyron and Magalie Dansac Le Clerc, Baker McKenzie Paris
the production of low-carbon energy and photonics – can also be considered sensitive activities.
In the defence sector, the government objected to the 2020 acquisition of Photonis – a supplier of night vision devices to the French Army – by US group Tel - edyne. Finally, the US group Flowserve was prohibited from acquiring two French subsidiaries of the Canadi - an group Velan, which manufactures industrial valves used in French nuclear submarines, aircraft carriers and nuclear power plants. Despite stricter FDI controls, France remains attrac - tive to foreign investors, with a record 53 projects announced totalling EUR40.8 billion in foreign invest - ment (Choose France summit 2025 edition). In 2024, 392 requests for clearance were filed with the FDI authorities (up from 255 in 2023), resulting in 182 authorised transactions under the FDI regime (includ - ing 54% subject to investor commitments, compared to 44% in 2023). Of these clearances, 26% were related to inherently sensitive activities (eg, defence), while 52% involved infrastructure, goods and services deemed essential to the French national interests. 3. Mergers and Acquisitions 3.1 Transaction Structures There are three main structures used for transactions in France – namely, through: • a sale and purchase of shares; • a sale and purchase of assets/business (ie, a busi - ness as a going concern); and • a merger (consisting of the automatic transfer of all the assets and liabilities, by operation of law, of the absorbed company to the absorbing company) or a contribution of assets/shares (consisting of the contribution of assets/shares in exchange for shares issued by the receiving company). Public company transactions are similarly structured through purchase of shares but are subject to spe - cific procedures under the supervision of the AMF. The acquisition of a public company can be structured either as a voluntary takeover bid on all outstanding shares of the target company or as the acquisition of a block of shares followed by a mandatory takeover bid on all remaining outstanding shares if the bidder
2. Recent Developments and Market Trends 2.1 Current Economic, Political and Business Climate The position of French FDI regulations – and, more generally, the French authorities – regarding foreign investment control follows the European and, more broadly, global trend of reinforcement and heightened protection of sovereignty and national interests. France has a very mature set of FDI regulations that has been regularly reinforced, mainly in 2014 and then in 2020 following the COVID-19 crisis. Initially focused on the defence sector, the FDI regulations were later extended to protect other critical sectors and infra - structures, including public health, energy, transporta - tion, and telecommunications. The scope of protected critical technologies is also regularly enriched, with the most recent addition being AI, biotechnologies, and technologies related to the production of low-carbon energy or photonics. The types of transactions covered are also regu - larly expanded. By way of example, the acquisition of French branches of foreign companies are now in scope, and the threshold for voting rights acquired directly or indirectly in a French company was low - ered several times – from 33% to 25% for non-EU investors and even 10% specifically for French listed companies. The past few years have seen a growing incidence of highly “publicised” use of the French FDI regulations by the French authorities. Notable examples include the early prohibition by the Ministry of Economy of the acquisition by the Canadian company Couche-Tard of the French food retailing group Carrefour in 2021, citing “national food supply security concerns”. More recently, at the end of 2024, stringent commitments were imposed on the US fund CD&R for its acquisition of a stake in Sanofi’s subsidiary Opella, which primar - ily produces the Doliprane drug.
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