According to French “Echos” on January 3, the French government officially vetoed the acquisition of a company from its partner country, the United States. In mid-December last year, the French government rejected the acquisition of French optoelectronics technology company Fortonis by the American company Tletin, thus setting a precedent for hindering foreign investment, while those previous move was mainly aimed at Chinese companies.
According to Refinitiv, US companies invested US$110.5 billion in France from 2008 to 2020, far more than other countries (including Chinese companies’ investment of US$18 billion). Even in the case of Alstom’s acquisition, the strict control measures implemented by the then Minister of Economy, Arnold Castel, failed to prevent General Electric from interfering in the French energy sector.
The French government’s rejection of the Futonis acquisition signifies a break with some past practices. This is the government’s first official rejection of foreign acquisitions. More importantly, it involves an “ally” enterprise. Teledin has entered France in an extensive manner with than 800 French employees as a supplier recognized by the French Ministry of Defense.
In addition, as Tredin pointed out in its report to the Securities and Exchange Commission, this is one of the measures taken by the French Ministry of Finance to implement a new framework for controlling foreign investment. People now see France change course while protecting its strategic interests.
Pascal Dupera, the French strategic expert, analyzed: “By rejecting a deal from an allied company in the case of the acquisition of Futonis, and at the time of the transfer of power of the US government, the French government has indicated that it can request its institutions to be flexible and clever in a fair and unbiased way.”
The French government participated in the analysis of the buyer’s credibility assessment about a year ago, and now it has rejected the acquisition. Pascal Biner, a lawyer partner of the American Star Law Firm, said: “Foreign buyers will inevitably consider the existence of certain political risks in the future, which may lead to the rejection of the acquisition case under certain circumstances, even in the final stage. “
