By Hugh Carnegy and Michael Stothard in Paris and Elizabeth Rigby in London
France’s Socialist government has provoked a sharp clash with the UK over how to deal with foreign corporate acquisitions by arming itself with new powers to block takeovers.
As the UK government agonises over Pfizer’s £63bn takeover approach for AstraZeneca, Arnaud Montebourg, France’s firebrand economy minister, announced a decree requiring state approval for most foreign acquisitions as part of his battle with General Electric, which is trying to buy Alstom’s energy business for £13.5bn.
The move was condemned by Vince Cable, Britain’s business minister, who said it was a ploy to fend off domestic criticism of the government’s handling of GE.
“This is not a serious proposal. The French government is subject to the same European rules as we are,” he said. “This in no way changes the measured and rational approach that the UK government is taking.”
Mr Montebourg insisted the decree was a “choice of economic patriotism”.
“It is an essential rearmament of public power. France cannot sit back while other states are acting,” he said, insisting that the decree was narrower in scope than the powers held by the Committee for Foreign Investment in the US.
Mr Montebourg was immediately put on notice by Brussels, which has powers to block both the decree and any action against individual takeovers.
Michel Barnier, European commissioner for the internal market, said the decree would be “thoroughly examined” for compliance with EU law. He said France could not subject all transactions of purchasing a company to national approval. “Clearly that would be protectionism,” he said.
The decree toughens measures that give the state an effective veto over takeovers in sectors such as defenceto include energy, transport, utilities and health. Described by one French official as a “nuclear weapon”, the measure will give the government fresh leverage in its talks with GE over Alstom.
Just as Pfizer’s bid has triggered a debate over the potential loss of key technologies and skills in the UK, GE’s plan to buy Alstom’s energy unit has sparked controversy in France. (FT)