FRANCE Law and Practice Contributed by: Karl Hepp de Sevelinges, Nicolas Martin, Cyril Deniaud and Benjamin Cohu, Jeantet
in order to prevent anti-competitive practices and ensure compliance with EU and French antitrust rules (see 2.4 Antitrust Regulations ). • French Ministry of Economy and Finance – is responsible for screening foreign direct investments (FIC) in strategic sectors that could affect the national interests of France under the French FIC regime (see 2.3 Restric- tions on Foreign Investments ). • European Commission – for cross-border deals that meet certain revenue thresholds, merger control can fall under the jurisdiction of the European Commission, which evalu - ates the deal’s impact on competition within the EU single market. • Sector-specific regulators – Certain industries – like banking, insurance, and telecommuni - cations – require approval from specialised regulatory bodies, such as the Autorité de contrôle prudentiel et de résolution (ACPR) for financial institutions and the Autorité de Régulation des Communications Electron- iques, des Postes et de la distribution de la Presse (ARCEP) with respect to telecommuni - cation industry. 2.3 Restrictions on Foreign Investments France has established a robust foreign invest - ment control (FIC) regime designed to protect national interests and security in sectors con - sidered as being sensitive. This FIC regime applies to foreign investors, including non-EU and non-EEA investors, as well as EU/EEA investors, envisaging acquiring the control of a French target operating sensitive activities. The scope of sensitive sectors has expanded in recent years and now notably covers defence, energy, telecommunications, public health, media, transport, food security, water supply
and gambling activities. It also includes R&D activities in critical technologies like artificial intelligence, cybersecurity, biotechnology and semiconductors. French Ministry of Economy and Finance has wide discretion in the assessment of the mate - rial scope of application of the FIC regulations and it currently tends to control transactions that may previously have been considered out of the scope of its control. The French FIC regime requires prior authorisa - tion from the French Ministry of Economy and Finance with respect to the following types of investments in sensitive sectors: • acquisition of direct or indirect control of the French entity; • acquisition of a branch of activity of a French entity; and • crossing certain thresholds of voting rights in a French entity by non-EU investors (ie, 25% for private companies and 10% for listed companies). The French Ministry of Economy and Finance reviews prior authorisation requests in a two- step process: • Phase 1 – 30 business days, leading either to a decision that the notified transaction does not fall within the scope of the authorisation, an authorisation, or a notification that the investment requires further review and the opening of a Phase 2; and • Phase 2 – 45 business days from receipt of the “Phase 1-Notice” , leading to an authorisa - tion (which may be subject to conditions) or a refusal.
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