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France Extends State Scrutiny of Foreign Investment as Pandemic Continues

11/29/2021 | 03:17am EST

By Joshua Kirby and Dimitri Delmond

France is to extend a temporary measure stepping up state control of foreign investment in major companies to protect them amid the continuing coronavirus pandemic, finance minister Bruno Le Maire told TV channel France 2 on Monday.

For a further year, until the end of 2022, the threshold of voting rights at which ministerial authorization is needed for foreign direct investment in "sensitive" French companies will continue at 10%, from 25% in normal times. The measure was originally introduced in April 2020 and aimed to protect French companies amid pandemic-induced market volatility and sharp falls in valuations, which make them vulnerable to unfriendly approaches, according to the ministry's treasury directorate-general's website.

A potential takeover bid for French grocer Carrefour SA by Canada's Alimentation Couche-Tard Inc. was called off in January this year after Mr. Le Maire said the government would block any such deal. Carrefour, as a major food distributor in France, is too important to the country's supply chain to be sold off, the minister said at the time.

The measure only applies to bids from outside the European Union and European Economic Area for listed French companies, according to the directorate-general. The threshold was originally planned to revert to 25% at the end of 2020 before a first extension until Dec. 31 this year. The measure will now apply until Dec. 31, 2022, Mr. Le Maire said.

In the same interview, the minister said he wasn't worried about the effects of the new Omicron coronavirus variant on France's economic growth. The country's growth is "solid" and rests on good foundations, Mr. Le Maire said. He noted, however, that concerns remain around supply constraints in the automotive and constructions sectors, as well as recruitment squeezes in hospitality, and inflationary pressure relating to supply bottlenecks.

This story was translated in whole or in part from a French-language version initially published by L'Agefi-Dow Jones.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby ; and to Dimitri Delmond at ddelmond@agefi.fr

(MORE TO FOLLOW) Dow Jones Newswires

11-29-21 0317ET

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