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COVID-19: Acquisition of more than 10% voting rights by non-EU/EEA foreign investors in French listed companies will be subject to fast-track FDI review

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The French Foreign Investments Control regime has recently been reinforced following a reform introduced by Decree n° 2019-1590 of 31 December 2019 and the Ministerial Order of 31 December 2019 relating to foreign investments in France. This reform, entered into force on 1 April 2020, seeks to capture new strategic sectors, refine certain concepts, and provide a clearer review framework for investors.

In view of the COVID-19 pandemic, the French Minister of the Economy announced the adoption of two new measures aimed at protecting French companies that are active in strategic sectors – defined to include security-related industries and defence, critical infrastructures, critical technologies (such as AI or quantum technologies), sensitive public health activities – from potentially opportunistic buyouts.

The first measure adopted in April 2020 expanded the list of sensitive activities to include R&D activities related to biotechnologies.

The second measure, published on 23 July 2020, lowers the threshold to 10% for review of non-EU/EEA investments made directly or indirectly by a sole investor or by several investors acting in concert in French listed companies active in the above listed strategic sectors. The foreign investor must notify the Minister of Economy with respect to the intended investment through a fast-track procedure.The notification must include basic information regarding the foreign investor and the intended investment (i.e., level of expected participations/voting rights, strategy pursued vis-à-vis the target, governance issues). In the absence of a response from the Minister of Economy within ten business days from the date of the notification, the investment is deemed to have been approved. The foreign investor has then six months to close the transaction. If the Minister of Economy objects to the notification, the foreign investor can seek authorisation for the investment through the regular FDI review process, which in turn may take up to 75 opening days if mitigation requirements are imposed.

 

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