A takeover of a French company carrying on so-called ‘sensitive’ activity in France by a company ultimately controlled by foreigners - European Union and non-EU - is subject to the prior authorization of the Ministry of the Economy, Industry and Digital Sector. The recent increase in foreign direct investment authorization requests and the announced veto position of the French state on the Photonis/Teledyne prompts us to review the main aspects of this authorization procedure and its consequences for M&A transactions. As national security foreign investment review regimes increase in number and importance globally, this article looks at the French review mechanism, or U.S. CFIUS counterpart.

Originally published in Bloomberg Law - August 2020.