France grabs for power over Alstom future with new takeover law
By Jean-Baptiste Vey and Benjamin Mallet
PARIS (Reuters) - The French government gave itself the power to block foreign corporate takeovers in "strategic" sectors on Thursday, throwing up a potential roadblock to General Electric's (GE.N: Quote) $16.9 billion bid for Alstom's (ALSO.PA: Quote) energy assets.
The decree swiftly drew a warning against "protectionism" from the EU official in charge of competition, and was called a "bad idea" by French employers' group MEDEF. General Electric (GE) said it would pursue its talks for a deal with Alstom, but some analysts suggested rival suitor Siemens would now be encouraged.
The move extends a 2005 law on defense and other industries and gives the state much-increased powers to block foreign takeovers in the energy, water, transport, telecoms and health sectors - potentially affecting about a quarter of the companies in France's CAC-40 blue-chip equities index.
Any such acquisition will now need the approval of the economy minister, the decree published in France's Official Journal said.
The current holder of the post Arnaud Montebourg - a self-described "economic patriot" - has criticized the proposed Alstom-GE deal for fear of the impact on French jobs and prestige, and advocated a tie-up with Siemens, which he says would create European champions in power and trainbuilding.
"With this reform, France will have a clear and efficient legal framework comparable to that in a number of other open economies within and outside Europe," he said in a statement.
"This new measure will of course be applied in a selective and proportionate manner, taking into account the merits of each situation," he said, adding the decree would take effect within 24 hours of publication.
"This is the end of laisser-faire," he told Le Monde in an interview published later. Continued...