French Takeover Bid Raises Eyebrows

by Robin Pilgrim, LawAndTax-News.com, London

02 September 2005

The move by French building-materials group, Compagnie de Saint-Gobain to launch a £3.68 billion hostile takeover bid for UK plasterboard manufacturer, BPB Plc has caused consternation, especially given the French government's recently announced stance on foreign takeovers in the opposite direction.

In an interview with French newspaper, Les Echos on Monday, French Industry Minister, Francois Loos revealed that the government is planning to restrict foreign takeovers in certain industry sectors.

Speaking with regard to the rumoured takeovers by overseas companies of food group Danone and nickel firm, Eramet, Mr Loos stated that the cabinet is likely to press for the implementation of new rules allowing French firms to employ the same anti-takeover measures in foreign bids that they are permitted to use domestically.

He additionally revealed that the French authorities are planning to publish a list of industry sectors considered strategically important, which will therefore be protected to a large extent from foreign buyouts. According to Mr Loos the moves, which are unlikely to be welcomed by the European Commission, are designed to "bolster the competitiveness and independence of our companies and...see to it that they can fight with the same weapons as their foreign peers".

Although the full list of industry sectors to be protected has not yet been published, the Wall Street Journal revealed this week that they are likely to include antidote production, biotechnology, casinos, cryptology and dual technologies which can be used for both civil and military activities.

The WSJ went on to report that according to unnamed French Industry Ministry sources, the oil and food industries have not been included on the list.

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