France moves to thwart US acquisition of Velan's nuclear business

By Al Mayadeen English
Source: Bloomberg
3 Aug 2023 14:42

The French government has already excluded Segault SAS, a supplier of nuclear submarine parts, from the deal to maintain ownership of critical technology within the country's borders.

Saint Alban du Rhône Nuclear Power Plant (AFP)

France is taking measures to protect its strategic industry by preventing Velan SAS, a domestic supplier of nuclear reactor parts, from falling into the hands of a US company, a new report by Bloomberg highlighted.

Velan SAS is a French unit of Quebec-based Velan Inc., which is being acquired by Flowserve Corp. in an all-cash transaction.

The French government has already carved out Segault SAS, a nuclear-submarine parts supplier, from the deal to ensure key technology remains in domestic ownership. Now, the focus is on Velan's business in France, and the government may either block the purchase or impose restrictions.

This move comes as President Emmanuel Macron emphasized Europe's need for more autonomy in the wake of the Covid pandemic and geopolitical events like the war in Ukraine.

French lawmakers are concerned about the impact of the takeover on businesses in France, given Velan SAS's role as a supplier to state-owned utility Electricity de France SA and its significance in the nuclear industry.

In the wake of the repercussions of the Ukraine war and as part of efforts to bolster its economic autonomy, France has expressed concerns about US companies taking over French companies and businesses. The fear is that such takeovers could lead to a loss of control over critical industries, including defense and nuclear-related sectors.

President Emmanuel Macron has been advocating for greater European self-reliance to mitigate the impact of geopolitical events and crises like the Ukraine crisis. By protecting strategic industries from foreign acquisitions, France aims to safeguard its economic interests and maintain control over vital technologies and resources, reducing dependence on external actors during times of geopolitical uncertainty.

Read next: The US scapegoat: Europe dragged into yet another conflict

The big picture

In light of the sweeping energy crisis throughout the EU, serious concerns have been raised since Washington adopted the Inflation Reduction Act (IRA) on August 16, 2022, which many officials believe will entice crucial enterprises to invest in the US rather than the EU.

Some EU officials have gone as far as criticizing the bill for breaching international trade rules.

The IRA specifically covers a wide range of areas, including energy-related legislation.

It increased the Investment Tax Credit for renewable energy projects from 26% to 30% and extended it to all storage projects. It also includes tax credits to manufacture solar panels, inverters, and racking components.

In addition, there are more tax credits for electric vehicles, electrical panels, heat pumps, and many other products directly related to the renewables industry.

The bill promises to put the difference of about $300 billion toward deficit reduction. It will also provide $369 billion in funds for energy security and climate change. $64 billion will be allocated to the Affordable Care Act over the next ten years.

Moreover, it will raise $739 billion in revenue by imposing a 15% corporate minimum tax. Printing that much more money to solve inflation does not seem to be a valid approach. But because the US dollar is the global reserve currency, there is no real trouble it that.

The bill will also aim to reform prescription drug pricing policies, boosting Internal Revenue Service tax enforcement and addressing the carried interest loophole.

President Emmanuel Macron has been voicing opposition to the Inflation Reduction Act (IRA) as he believes it could have negative consequences for the country's economic recovery.