France shields Carrefour from takeover in food security battle
Economy minister says Paris is ready to use new investment screening powers.
Paris is ready to use its new investment screening powers in the name of food security to make sure that Carrefour will stay French.
With a defiant display of economic patriotism, France's Economy Minister Bruno Le Maire made clear on Friday that the government will stop Canada's Alimentation Couche-Tard from taking over retail giant Carrefour.
"This health crisis has taught us one thing — food security has no price," Le Maire said in a radio interview with the RMC network, making clear that Paris is "not in favor of this deal" and would use its investment screening mechanism to block it, if necessary. "It's a polite, but clear and definitive no."
France extended its anti-takeover powers to new sectors including food retail in 2019. Le Maire said he was ready to use them to block the Canadians.
"We have a tool. It turns out that we have been far-sighted," Le Maire said, while hoping he wouldn't need to activate it.
The global pandemic is giving France and other EU countries an extra argument to oppose foreign takeovers for strategic reasons during a phase in which tougher investment screening has also become a mantra in Brussels.
"We were happy to have our distributors, particularly in March during the first lockdown, playing the game of supply security ... the lesson I draw from all this is that food security is indeed strategic for our country and that you don't give up one of the big French distributors," La Maire explained, adding that Carrefour is the No. 1 private employer in France and accounts for approximately 20 percent of the country's food supply.
France's business community fears that such opposition to the takeover might give a negative and protectionist image of France to the rest of the world, the newspaper Les Echos reported.
A trade union welcomed Le Maire's statement, fearing that the takeover might result in layoffs. But the Canadian buyer is ready to invest approximately €2.9 billion in Carrefour, according to Bloomberg.
France has traditionally been highly protective of its food industry.
The country introduced state control on foreign investment in 2005, also in reaction to rumors that U.S. soft drink giant PepsiCo was interested in taking over French dairy giant Danone. The measure was taken by a center-right government led by Dominique de Villepin, in which Le Maire served as adviser of the then-prime minister and EU Internal Market Commissioner Thierry Breton was economy minister.
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