France tightens scrutiny of ‘sensitive’ foreign investments
France will require non-EU investors to obtain government approval before acquiring more than 10% of shares in French companies operating in sensitive sectors and listed outside the EU. Prime Minister Sébastien Lecornu said the move responds to heightened geopolitical tensions.
Prime Minister Sébastien Lecornu announced that the French government will need to approve attempts by non-European investors to buy more than 10% of shares in French companies that operate in sensitive sectors and are listed on a stock exchange outside the European Union.
In a post on X on Sunday, Lecornu said that against a backdrop of heightened geopolitical tensions, oversight of foreign investments in sensitive sectors is being strengthened. He described the responsibility as twofold: supporting the growth of French businesses while safeguarding strategic interests.
The threshold will apply to government-designated sectors, including defense, critical infrastructure, and key technologies. Lecornu’s office said in a press release that the government would give its response to any proposed foreign investment within 10 days of notification, so as not to place an undue burden on companies’ ability to raise capital in financial markets.
The measure is intended to guard against opportunistic acquisitions by non-EU investors in French companies listed outside the EU that could pose risks to national security.
France previously set up a screening process for planned acquisitions of more than 10% of shares in French companies listed on European markets during the Covid-19 pandemic, aiming to protect strategic companies at a time of crisis. That measure was later made permanent and is now being extended to French companies listed outside the EU.
Earlier this year, Lecornu asked three lawmakers from his center-right coalition to produce a report on France’s economic security. The document, obtained by POLITICO, called for a “radical change in posture” and urged the government to take a holistic approach to protecting strategic assets, securing critical supply chains, reducing dependencies, and strengthening technological sovereignty.
Other EU countries, including Germany and Spain, have similar foreign investment screening regimes with a 10% threshold for acquisitions in strategic sectors. The new rules will take effect in the coming days.
