France issues law to block foreign takeovers of strategic firms
By Jean-Baptiste Vey and Benjamin Mallet
PARIS (Reuters) - The French government has issued a decree allowing it to block any foreign takeovers of French companies in "strategic" industries, throwing up a potential roadblock to General Electric's (GE.N: Quote) planned $16.9 billion bid for Alstom's (ALSO.PA: Quote) energy assets.
The decree published in the official state gazette on Thursday, and seen by Reuters, will give the state much-increased powers to block foreign takeovers in the energy, water, transport, telecoms and health sectors.
Any such acquisition will now need the approval of the Economy Minister, the decree published in France's Official Journal said.
The government had not previously given any hint it was considering such a measure, although Economy and Industry Minister Arnaud Montebourg has openly criticized the Alstom-GE proposal and instead advocated a European tie-up with Germany's Siemens (SIEGn.DE: Quote).
The French engineering group has given itself until the end of the month to review its options.
"With this decree, we're armed to continue discussions and negotiations with the two companies that have expressed an interest," a source close to Montebourg said.
GE declined to comment. No one at Alstom was immediately available for comment outside European business hours.
Cash-strapped Alstom, which builds France's high-speed trains, was bailed out by the French government a decade ago and is seen by many in France as an embodiment of the country's engineering prowess. Continued...