France boosts say on Alstom with foreign takeover law

Surprise decree could be obstacle to General Electric's takeover of France's Alstom, as industry minister talks of need for 'economic patriotism'.

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The French government has issued a decree allowing it to block foreign takeovers of French firms in "strategic" sectors, throwing up a potential roadblock to General Electric's $16.9 billion bid for Alstom's energy assets, reports The Chicago Tribune.

The decree, extending an existing 2005 law relating to the defense and other industries, was published in the official state gazette on Thursday and gives the state much-increased powers to block foreign takeovers in the energy, water, transport, telecoms and health sectors.

Any such acquisition will now need the approval of the Economy Minister, the decree published in France's Official Journal said.

"With this reform, France will have a clear and efficient legal framework comparable to that in a number of other open economies within and outside Europe," Economy Minister Arnaud Montebourg, who has repeatedly insisted any outcome for Alstom must be in France's national interests, said in a statement.

"This new measure will of course be applied in a selective and proportionate manner, taking into account the merits of each situation," he said, adding that the decree would take effect within 24 hours of publication.

The move comes 10 days ahead of European Parliament elections in which President Francois Hollande's Socialist party is expected to do badly due to its failure to tackle unemployment, and where the National Front - campaigning on a protectionist, anti-EU platform - is set to score big gains.