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* Socialist decree echoes rivals' "economic patriotism"
* List of protected sectors widens, but rarely used
* French say U.S. has stronger takeover defences
* French companies also grew through foreign acquisitions
By Tim Hepher
PARIS, May 15 France's decision to expand its
veto powers over strategic sectors to give it some leverage on
the future of engineering group Alstom reflects a rare
area of policy consensus that resonates across the political
New rules published by the Socialist government on Thursday
expand a nine-year old watch list of sensitive sectors from
defence, security and anti-money laundering to touch a much
wider range of services. [IDn:L1N0O02AC]
The original 2005 decree came hard on the heels of a
campaign for "economic patriotism," a phrase coined earlier by
conservative parliamentarian Bernard Carayon.
It became a key slogan of the premiership of another
conservative, Dominique de Villepin, having risen up the agenda
after French voters defeated European reforms in a referendum.
Some French politicians argue their takeover controls are
more lax than those of the United States, where a government
panel vets foreign investments for impact on security.
Washington barred Dubai Ports World from buying port operator
P&O in 2006 and China's CNOOC from buying oil firm Unocal in
French alarm bells about foreign takeovers were first rung
by a private equity firm's move in 2000 to take a stake in a
French smart-card technology company, Gemplus. In 2005 France
dashed to the support of Danone in the face of a rumoured bid
from PepsiCo, which never actually materialized.
Critics of such manoeuvres say France itself benefits from a
high proportion of global companies in its blue-chip index,
including Sanofi, formerly Sanofi-Aventis, formed from
an initially hostile bid for a German firm that carried
In practice, experts say, the laws restricting takeovers
have rarely been used. Pressure, when successful, is usually
applied outside such a framework and rarely along predictable
In 2006, Villepin's centre-right government oversaw a merger
of energy firms Suez and state-controlled Gaz de France to
create GDF Suez and fend off a bid by Italy's Enel.
Yet in 2012, the Socialist government backed a proposed
merger between aerospace group EADS and Britain's BAE
Systems that would have led to a smaller French role in
the sensitive European group, only to see it blocked by Germany.
Below is the list of strategic sectors in which foreign
takeovers can be vetoed by the French government.
2. Regulated private security companies
3. Prevention of terrorist activities using pathogens or
4. Eavesdropping and electronic interception
5. Evaluation and certification of IT systems
6. Provision of computer services to public operators or
7. Dual-use technology
9. Businesses with access to defence secrets
10. Arms manufacture and trade
11. Companies contracted by the defence ministry in
connection with 7. to 10. above.
(*Casinos were exempted in 2012 but the broader gaming
category remained subject to takeover restrictions)
Added by 2014 decree
12. Security and continuity of supplies that are essential
to public order or safety and national defence, as follows:
a) Electricity, gas, hydrocarbon or other energy supplies
b) Water supplies
c) Transport operators
d) Electronic communications
e) Installations of vital national interest
f) Protection of public health
(Reporting by Tim Hepher; Editing by Andrew Callus and Peter