Foreign investment controls in France are tightly interwoven with national defence. These controls serve both to shield strategic defence firms from foreign takeovers and to ensure that any foreign investment aligns with France’s sovereignty, security, and public order. The legal framework identifies sensitive activities as being automatically subject to FDI review - particularly those tied to arms, dual-use technologies, or contracts with the Ministry of Defence. This structure allows for a rigorous application of controls, especially in an era where economic security is increasingly linked to military readiness and resilience.

The foundation of this scrutiny is France’s Defence Industrial and Technological Base (BITD), a network of firms ranging from major contractors to specialised SMEs and startups. Managed in part by the Directorate General of Armaments (DGA), the BITD ensures that defence production is robust and self-reliant. Recent regulatory enhancements have tightened requirements for foreign investors, often mandating detailed commitments (letters of engagement) to maintain production, safeguard intellectual property, and avoid dependence on foreign export regimes like the U.S. ITAR system. In some cases, deals are outright blocked - especially where U.S. ownership might compromise French strategic autonomy.

This workshop will explore this complex ecosystem of FDI regulation in France's defence sector. It will review the evolving scope of security - from classic military threats to modern domains like cyber and cognitive warfare - and how this evolution impacts investment scrutiny. Through case studies like Photonis/Teledyne and Segault/Flowserve, panellists will examine both rejected and approved deals, gaining insight into how states balance openness with sovereignty. The session will also highlight Europe's growing role in fostering cross-border defence consolidation while preserving national security prerogatives.