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17 June 2020
In the context of the worldwide economic crisis caused by the COVID-19 pandemic, the EU authorities recently issued guidelines to reinforce the protection of strategic sectors and vulnerable companies from foreign investment. However, the measures taken by France are not as far reaching as in other EU countries, as the French authorities chose to extend the measures to biotechnologies and take precautionary temporary measures with respect to listed companies.
A ministerial order published on 27 April 2020 amended the ministerial order of 31 December 2019 and extended the list of sensitive activities to include biotechnologies (for further details please see "Private M&A transactions: new regulations strengthen French state control over foreign investments", "Private M&A transactions and PACTE: part one" and "Private M&A transactions: new decree on foreign investments enters into force"). In the context of the current pandemic, companies using biotechnologies to find a COVID-19 vaccine come to mind.
The minister of economy also announced that a temporary decreased threshold of 10% (instead of 25%) would apply exceptionally to acquisitions made by non-EU and non-EEA investors on listed companies until 31 December 2020 and would trigger a specific fast-track procedure of foreign investment control. The aim of this foreseen measure is to further protect companies which might have been made vulnerable by the current economic situation (eg, suffering a steep drop in share price) and whose ownership is so dispersed that a 10% acquisition could significantly affect and destabilise them.
Considering the current pandemic and economic uncertainty, these new regulations complete the control regime applicable to foreign investments in order to avoid companies becoming vulnerable to unfriendly acquisitions.
For further information please contact Alain Levy, Gwenaëlle de Kerviler or Valérie Attia at AyacheSalama by telephone (+33 1 58 05 38 05) or email (email@example.com, firstname.lastname@example.org or email@example.com). The AyacheSalama website can be accessed at www.ayachesalama.com.
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