Why France will have to accept many corporate acquisitions by non-residents

The French government's rejection of the purchase of Carrefour by Couche-Tard has reignited the debate on acquisitions of French companies by non-residents. However, there will inevitably be such acquisitions: French companies will have to strengthen their equity, particularly in troubled sectors where their debt has increased sharply; French residents’ savings in equities are small and insufficient to cover these equity requirements; France’s external deficit is becoming very large, which makes large capital inflows necessary. It will therefore be impossible to prevent all acquisitions of French companies by foreign companies or foreign investment funds, and the French government must therefore announce a doctrine. This means, for example, rejecting acquisitions of French companies by foreign companies in truly strategic sectors, when there are no industrial synergies, when there is a high risk of job losses or offshoring of research activities, or misappropriation of intellectual property.