For international investors, foreign investment screening has traditionally been perceived as a simple regulatory checkpoint: a transaction is either approved or blocked. France is increasingly moving beyond that binary approach.
While the French foreign investment regime, known as “IEF” (Investissements Étrangers en France), remains formally based on prior ministerial authorisation for investments involving sensitive activities, recent practice suggests a broader evolution. The French State is no longer acting only as gatekeeper. It is increasingly shaping how strategic transactions are structured, governed and monitored after closing.
This shift reflects a wider European trend. Rather than prohibiting foreign capital, governments are seeking to preserve influence over strategic assets through governance tools, ownership arrangements, binding commitments and long-term industrial undertakings. In France, this trend is particularly visible in sectors connected to healthcare, defence, critical infrastructure and technological sovereignty.
The French Treasury’s recent figures confirm that conditional approvals are now a core feature of the system. In 2024, 392 filings were submitted to the French Treasury, 182 investments were authorised and 54% of those authorisations were subject to specific conditions designed to address identified risks. Foreign investment review is therefore not only about whether a transaction may proceed, but also about the governance framework within which it may proceed.
Recent French examples illustrate this evolution.
One of the most visible recent cases was the Opella transaction, involving Sanofi’s consumer healthcare business, including Doliprane. Rather than opposing the operation outright, the French authorities supported a governance solution combining a reinforced French anchoring of strategic decision-making, binding commitments on production, employment, headquarters, R&D and investment in France, and the participation of Bpifrance as a minority shareholder with board representation. The transaction became emblematic of a new philosophy: not “no foreign investor”, but “foreign investor under defined governance conditions”.
A similar logic can be seen in Biogaran, a key player in generic pharmaceuticals in France. Its acquisition by BC Partners, alongside Bpifrance, was approved subject to commitments to maintain headquarters and operations in France, safeguard jobs and ensure industrial continuity. Here again, the focus extended beyond ownership to resilience and strategic anchoring.
In more sensitive industrial sectors, governance tools are even more explicit.
The LMB Aerospace transaction is a clear example. Following its sale to a foreign buyer, the French State acquired one share for a symbolic price, reportedly as a form of golden share to retain oversight over key strategic decisions. This illustrates how foreign investment control can be combined with post-closing governance rights where strategic capabilities are at stake.
Golden shares deserve particular attention. Unlike ordinary minority stakes, they grant disproportionate governance rights, such as veto or prior approval over predetermined strategic decisions (e.g. relocation of sensitive activities or disposal of critical assets). Once exceptional, these mechanisms are becoming more common alongside foreign investment review.
Bpifrance also plays a central role in this framework. Often misunderstood abroad, it is neither a traditional sovereign wealth fund nor a simple government agency. Created in 2012 and jointly owned by the French State and Caisse des Dépôts, it acts as France’s public investment institution, financing companies, supporting innovation and taking strategic minority stakes where needed.
From an international perspective, Bpifrance sits somewhere between Germany’s KfW, Italy’s CDP Equity and a strategic industrial investor. Its role is not necessarily to control companies, but to ensure that strategic capabilities remain anchored in France while enabling private and international investment.
Importantly, this does not signal a retreat from openness. France remains among Europe’s most active destinations for foreign investment and continues to attract international capital. The message appears more nuanced: capital remains welcome, but governance increasingly matters.
For dealmakers, this means that foreign investment review should no longer be treated as a late-stage regulatory filing. In sensitive sectors, it is part of transaction design, alongside governance architecture, shareholder agreements and long-term industrial commitments.
The practical lesson is clear: in France, successful transactions increasingly depend not only on obtaining clearance, but on anticipating the governance framework required to secure it.
