The French government opposed on Friday October 6 the sale to the American company Flowserve of the companies Segault and Velan SAS, specializing in valves for submarines and nuclear power plants, under the control of foreign investments. Bruno Le Maire, Minister of the Economy, “took this decision to refuse the two takeovers, considering that the commitments which could have been proposed were not likely to sufficiently reduce all the risks associated with the acquisition”, said specified his office, cited by Agence France-Presse.

Foreign investments in France (IEF) are subject to control by the Ministry of the Economy whenever a non-European actor wishes to acquire 10% or more of the voting rights of a listed French company (or 25% of the voting rights of vote of an unlisted company) operating in a strategic sector.

Velan bought Segault, based in the Paris region, in 2007, without encountering opposition. Velan SAS, the French subsidiary of Velan based in Lyon, had been created by the Canadian group and was therefore not subject to IEF legislation. The Canadian group reached an agreement with Flowserve in January to be bought by the American company for $245 million (around 230 million euros).

325 foreign investments controlled in 2022

The French refusal has the consequence of scuppering the takeover of the entire Velan group by Flowserve, based in Texas. “Given the latest developments concerning the refusal of French regulations, Flowserve (…) intends to terminate the arrangement agreement,” announced the American group in a press release.

Segault employs 80 employees and achieved a turnover of 13.7 million euros in 2020. The company notably supplies the valves for the nuclear boiler rooms which equip French submarines. The Minister of the Armed Forces Sébastien Lecornu announced in May that France would veto its passage under American control. But the question still arose regarding Velan SAS.

This company with 280 employees and a turnover of 70 million in 2022 produces valves which equip all French nuclear power plants and more than 350 nuclear reactors around the world. In 2022, 325 foreign investments were controlled by France, according to the Directorate General of the Treasury. Among these operations, 194 were prohibited, 70 authorized under conditions and 61 validated without restriction.