New French rule on takeovers could effect GE Alstom bid
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New rules introduced by economy minister Arnaud Montebourg on Thursday could be used to block current attempts by the American company General Electric to take over the French energy giant Alstom.
A new decree extends the sectors covered in a 2005 law, so that investments by foreign groups in key areas such as energy, water, transport, health and telecoms must first be vetted by the French government.
The law already covered the sectors of defence, information technology and gambling.
The government today rejected accusations that the move amounted to protectionism.
“The fundamental role of the state is to protect the strategic interests of France”, finance minister Michel Sapin told French radio station Europe 1.
French economy minister Arnaud Montebourg is openly opposed to a buyout of Alstom’s energy wing by General Electric and has instead encouraged a tie-up with the German company Siemens.
The board of Alstom will decide by the end of May which offer it prefers, although it has already signalled favour for the GE offer.
France is not alone in seeking to keep control of some key industries.
The Committee on Foreign Investment in the United States examines foreign investment projects in the United States which it judges might have implications for national security.
Today Michel Barnier, the European Commissioner responsible for Europe’s single market, warned France against protectionism.
“The aim of protecting strategic national interests in each member state is essential insofar as it has implications for security or public order. This is clearly provided for in the treaty. But we must ensure that [this objective] is applied in a proportionate way, otherwise it is basically just protectionism,” said Barnier, who is himself a Frenchman.
“We will not assure the protection and development of European industry with protectionism”, he insisted, adding “a good way to safeguard industry is investment, not protectionism”.