Foreign firms barred from biotech, pharmaceuticals

31st August 2005, Comments 0 comments

PARIS, Aug 31 (AFP) - The French government unveiled Wednesday plans to shield 10 strategic business sectors, mostly linked to defence but including biotechnology and pharmaceuticals, from foreign hostile takeovers.

PARIS, Aug 31 (AFP) - The French government unveiled Wednesday plans to shield 10 strategic business sectors, mostly linked to defence but including biotechnology and pharmaceuticals, from foreign hostile takeovers.

The legislation necessary to implement the takeover block will be promulgated by decree, the industry ministry said.

Decisions to block a takeover or merger will be made on a case-by-case basis.

The other sectors are armaments, casinos, security, communication interception equipment, computer security systems, dual civil-military technologies, cryptology equipment, and businesses dealing with sensitive military information.

Many of the sectors on the list are linked directly or indirectly to national security, and thus are already eligible for protectionist measures, economists noted.

The European Commission, which oversees competition policy in the 25-nation European Union and could well veto the move, said it would have to see if the move is in line with EU regulations.

"We will have to see if the French measures are in line with community laws," said spokesman Gregor Kreuzhuber, adding that the commission did not currently have "sufficient information" about France's plans.

The EU's Treaty of Rome stops member states from blocking the free circulation of goods, expect mainly for reasons of public security.

Notably absent from the list were the food and metallurgy sectors.

When Industry Minister François Loos announced Monday the government was preparing a list of the strategic sectors, he cited food giant Danone and mining group Eramet.

Indicating the government's thinking, Loos said in an interview with French newspaper Les Echos that Eramet was "more strategic" than Danone.

Both have been the subject of recent takeover rumors, although the foreign companies named in the rumors -- Brazil's Vale do Rio Doce (CVRD) and the US soft drink and snack food company PepsiCo respectively -- have denied them.

Rumors last month that PepsiCo was contemplating a hostile bid for Danone triggered a hostile reaction in French political circles along with pledges of support to keep Danone in French hands.

The rumors during a two-week period were accompanied by a 27 percent jump in Danone's share price on the Paris stock exchange.

On July 27, Prime Minister Dominique de Villepin called for a commitment to "true economic patriotism," while President Jacques Chirac asked the government to "strengthen measures to protect our strategic enterprises."

Copyright AFP

Subject: French news, French economy, French industry, biotechnology, pharmaceuticals

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