The French government is seeking a buyer for nuclear-submarine parts supplier Segault SAS to bring what it sees as a key technology into domestic hands, people familiar with the matter said.
(Bloomberg) — The French government is seeking a buyer for nuclear-submarine parts supplier Segault SAS to bring what it sees as a key technology into domestic hands, people familiar with the matter said.
Current owner Velan Inc., based in Quebec, is being bought by US company Flowserve Corp. in an all-cash transaction valued at about C$329 million ($244 million) that is expected to close by the end of the second quarter.
Paris sees the takeover as an opportunity to carve out the France-based supplier of defense and civil nuclear technologies and bring it under French ownership, and is looking at whether the deal would qualify for a screening process put in place for sensitive businesses.
Segault provides components for nuclear-propelled submarines built by state-owned shipbuilder Naval Group and also makes industrial valves that are used on France’s Charles de Gaulle aircraft carrier.
French legislation allows for screening of foreign direct investment in sectors deemed sensitive to national interests. Approval from the Economy Ministry is required when one or more non-EU investors acquire more than 10% of the voting rights in such businesses.
The government can block such transactions or authorize them under certain conditions. The European Commission is working on a similar tool.
The attempt to avoid a business based in France falling into US hands comes at a sensitive time for relations between the two countries after President Emmanuel Macron irked allies during a trip to China last week in which he said Europe should avoid being dragged into a potential conflict over Taiwan, the island democracy that Beijing claims as its own.
Washington infuriated France two years ago when it signed a defense alliance with Australia and the UK, dubbed AUKUS, that led to Canberra scrapping a $58 billion contract for a fleet of 12 French-built, diesel-powered submarines.
On Tuesday, former Socialist economy minister Arnaud Montebourg, who created a name for himself championing “Made in France” products, publicly called for Macron to step in to make sure Segault ends up in French hands. He offered to buy the business with the help of domestic investment firm Otium Capital.
A spokesperson for the Finance Ministry declined to comment on Montebourg’s offer. Segault and Otium didn’t immediately return requests for comment.
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