February 16, 2018 / 7:43 PM / a month ago

France to broaden scope of veto over foreign takeovers: PM

PARIS (Reuters) - France is to broaden the scope of legislation which can be used to veto foreign takeovers, extending it to the fields of artificial intelligence, microchips, space and data storage, Prime Minister Edouard Philippe said on Friday.

French Prime Minister Edouard Philippe speaks during the World Government Summit in Dubai, United Arab Emirates February 11, 2018. REUTERS/Christopher Pike

The French government adopted a decree in 2014 under which any foreign takeover of French groups operating in sectors considered as strategic can be blocked. These currently include energy, water, transport, telecoms and health.

“We must strengthen the tools to protect French interests, that’s what China and the United States have been doing for a long time,” Philippe said at an event in a plant belonging to cosmetics group L’Oreal (OREP.PA) in northern France.

New measures will be added to draft legislation to be presented on April 18, the prime minister said.

Stake acquisitions by foreign entities in strategic firms generally receive a green light from authorities in exchange for binding commitments, he said.

The government also plans to create a legal framework to pave the way for a so-called “golden share” rule that would preserve state control over companies in which it has a minority stake.

    Philippe confirmed state investment bank Bpifrance and the country’s State Shareholding Agency APE were working on a financial envelope to fend off foreign takeovers of French groups.

    Bpifrance’s head said last week this envelope should amount to 3 billion euros.

    Reporting by Jean-Baptiste Vey; Writing by Mathieu Rosemain; Editing by Andrew Roche

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