Legal news
Foreign direct investment control – A recent example of the French policy
Over the past 15 years, France has increasingly reinforced its control over foreign investments. The list of sensitive activities subject to prior authorization has expanded substantially. Early 2024, a new regulation (i) expanded the list to activities related to the processing and extraction of critical raw materials (cobalt, lithium…), while (ii) setting permanently the (initially temporary, during the Covid-19 pandemic only) 10% voting right threshold for the control of investments by non-European investors in French listed companies.
France has been Europe’s most attractive country for foreign investors since 2021. As such, the challenge is to maintain an appealing market while protecting its strategic interests. A recent example illustrates the difficulty of finding the right balance.
Last October, Sanofi, the French pharmaceutical giant, announced the EUR 16bn sale of 50% of its subsidiary Opella, manufacturer of France’s best-selling drug, the famous over-the-counter painkiller “Doliprane”, to US private equity fund Clayton Dubilier & Rice (CD&R).
Even before initiating the FDI control process, the announcement raised serious concerns throughout the whole political spectrum, in particular over jobs and drug shortages. To such an extent that French economy minister shortly thereafter announced that the government had obtained “guarantees that Opella will be developed and maintained in France”. He further announced that, in order to monitor those guarantees, the French State’s investment arm, Bpifrance, will also buy 2% of the business, alongside CD&R.
The transaction will now undergo the FDI control process, which could lead to the imposition of additional conditions for the transaction to close.