France Temporarily Increases Level of Scrutiny for Foreign Investments in French Strategic Listed Entities: Until December 31, 2020, Non-EU/EEA Investors Crossing the 10% Threshold in Voting Rights of French Strategic Listed Entities Will Be Covered by the French Screening Regime

Sullivan & Cromwell LLP - July 27, 2020

On July 22, 2020, the French government issued a Decree and related Order (Arrêté) that temporarily strengthen foreign investment control procedures in France.  Pursuant to the Decree and Order, from August 7 to December 31, 2020 non-EU/EEA investors crossing directly or indirectly, alone or in concert, the 10% threshold in voting rights of French entities listed on a French or EU regulated market and operating in a strategic sector will be subject to the foreign investment screening regime; currently, the threshold for such screening is 25%.  This new set of measures follows the announcement by the French Minister for Economic Affairs on April 29, 2020 that foreign investment screening measures would be heightened in France in the context of the current health and economic crisis and the addition, as from April 30, 2020, of the biotech industry to the list of strategic sectors.   It also comes just a few months after a new set of foreign investment screening measures entered into force in France on April 1, 2020,  and is in line with recent reforms in Germany, Italy and Spain.