French Minister for the Economy and Finances Bruno Le Maire, in Pari,s on Oct. 4.BERTRAND GUAY/AFP/Getty Images
France blocked a deal that would have seen the takeover of two Canadian-owned French maker of valves used in nuclear reactors because it did not think commitments made by U.S. bidder Flowserve were sufficient, a finance ministry source said.
Flowserve, which makes pumps and valves, said on Thursday it was dropping its $245-million takeover of Montreal-based Velan, whose French subsidiaries Segault and Velan SAS make valves used in nuclear plants, submarines and aircraft carriers.
“The minister (Bruno Le Maire) took the decision to reject the two acquisitions because the commitments to reduce all risks associated with the deal were not sufficient,” the French finance ministry source told journalists on Friday.
The French government has extensive powers to vet proposed takeovers of French companies that it considers to be strategically sensitive, though outright rejections are rare.
Flowserve Chief Executive Scott Rowe said on Thursday that the firm had sought to address all of the French concerns.
“We do not believe the decision aligns with the French government’s stated goal of encouraging foreign investment into France’s economy,” Rowe said in the statement announcing that Flowserve was dropping its deal.
While President Emmanuel Macron has made a big push to promote foreign investment in France, he has also championed the idea of reinforcing Europe’s strategic autonomy from other regions, particularly in terms of defense and energy.
Some French senators had aired concern about the takeover, in particular that it could mean the U.S. government could order Flowserve to hand over information from its French subsidiaries.