FRANCE wants to tighten takeover rules to protect companies deemed strategic as it walks a fine line between preserving a surge in investments and preventing its technology falling into the hands of foreign powers like China and the United States.

In a wide-ranging business bill to be debated in the autumn, President Emmanuel Macron’s government is proposing to widen the scope for state intervention and substantially increase the use of “golden shares” to protect national interests.

Under the proposals, the finance minister could impose fines on investors who fail to seek prior approval to buy stakes in French companies deemed of strategic importance. These could be as high as 10 percent of the targeted company’s annual revenues, according to a draft.

The minister could also suspend investors’ voting rights or appoint a special trustee as part of the protective measures.

The move comes after several national champions such as train maker Alstom and telecom equipment maker Alcatel-Lucent changed flags in recent years.

General Electric’s acquisition of Alstom’s power division — whose turbines equip all of France’s nuclear reactors — Technip’s merger with U.S.-based FMC Technologies and Chinese investors’ increasing influence in Peugeot-Citroen and Accor are other recent examples.

They triggered intense national discussion over the means the government had to fend off such buyouts and led to parliamentary inquiries that questioned the absence of a U.S.-style legislative apparatus.

While Macron is a former investment banker and advocate of free trade, he has shown willingness to head off foreign acquisitions when national interests may be at stake.

(SD-Agencies)