France will tighten restrictions on foreign investment after the government said the coronavirus outbreak has left key assets vulnerable to takeovers.
The French government already bolstered its powers at the start of the year by tightening a mechanism to review and potentially block non-European investors from acquiring stakes in strategic companies. Finance Minister Bruno Le Maire said Wednesday he will cut the threshold for scrutiny to 10% from 25% and add thousands of biotechnology companies to the protected lists.
“It’s a massive strengthening of our capacity to control foreign investment in our technology, our businesses and our know-how,” Le Maire said on French television LCI.
France’s move is the latest sign of how the coronavirus is encouraging governments to put up barriers to foreign investors and assert national oversight of businesses. Like others, France is already offering hundreds of billions of state guarantees for loans to companies, which Le Maire said will also protect businesses.
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“In this crisis, certain businesses are vulnerable, some technologies are weakened and could be bought at a discount price by foreign competitors,” Le Maire said. “I won’t let that happen.” The lower threshold for state oversight will probably remain in place until the end of this year, he said.
Beyond protecting companies in France, Le Maire has also said the government is looking to repatriate supply chains, particularly in the pharmaceutical and biotech sectors.
“They are businesses that are participating in research for a Covid vaccine,” he said. “We absolutely must protect this French know-how.”
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