Foreign investments in France are subject to a prior authorization process by the State when they involve activities considered sensitive to public order, national security, or national defense interests. This procedure may lead to the prohibition or regulation of certain transactions in which foreign investors acquire control or significant influence over a French target, regardless of whether the investor is from the European Union.
Foreign Investment Control Encompasses a Broad Spectrum of M&A Transactions
The acquisition of a company or participation in a capital raise by a foreign investor should undergo an analysis to assess whether the foreign investment control procedure under French law applies. This procedure can impact the transaction timeline and, depending on the circumstances, may pose significant risks to the successful completion of the deal under the terms initially agreed upon by the parties.
Sensitive sectors include, for instance, companies operating, even occasionally, in the following areas:
Engaging in an M&A transaction that violates the regulations governing foreign investment control in France can lead to severe consequences, including the reinstatement of the prior situation (unless regularized under conditions approved by the authorities), significant financial penalties, and potentially criminal sanctions.
We Assist You Throughout the French and EU Foreign Investments Control Procedure
Leveraging our deep understanding of the French and European regulatory framework governing foreign investments, our law firm provides expert guidance to acquirers and investors in assessing whether a transaction falls under foreign investment control in France. Should this be the case, we assist our clients in preparing a compliant submission to the relevant authorities, navigating the authorization process, and seamlessly integrating this into the broader M&A transaction.
Also, explore our expertise in Mergers & Acquisitions, Private Equity, Joint-Ventures, and Shareholder Advisory.
