On 29 April 2020, the French Treasury announced additional emergency measures undertaken to strengthen its national foreign direct investment (FDI) screening mechanism. Currently, France makes subject to screening FDI in the following sectors: defense, energy, transport, public health, electronic communications, new technologies, aerospace, data center, and – as of 1 April 2020 – media and food safety.  To fall under the mandatory review, FDI should result in control, acquisition of a line of business or acquisition of more than 25% of shares or voting rights if an investor comes from outside the European Economic Area (EEA).

The new measure undertaken by France, in response to the COVID-19 pandemic, decreases temporarily the threshold of shares/voting rights acquisition from 25% to 10% in case a target company is listed and an investor comes from outside the EEA.  Each FDI subject to screening solely due to this new measure should be pre-notified to the Treasury that makes – within 10 days – a final assessment whether this FDI should go through the complete screening process.  This measure will enter into force as of the second half of 2020.

In addition, the French Treasury has permanently extended the list of industries subject to the screening by adding the biotechnology sector to the list of the controlled sectors of the national economy.

For additional information on the FDI rule changes, see our previous post.