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French Privatization Efforts Face Skepticism from Own Citizens and Foreign Investors

Strategic Insights

— 2 min read

The French government is launching its latest campaign to attract foreign investors to the country, despite its own citizens showing little interest in investing in partially privatized state assets. The sale of a 35% stake in Snecma, a state-owned aero-engine manufacturer, is expected to raise between €1.6bn and €2bn, setting the tone for other sales of government stakes in major state-owned companies. However, a poll conducted for BNP-Paribas reveals that 87% of French individuals and 73% of small shareholders are hesitant to invest in new privatizations or initial public offerings (IPOs), citing company strategies and the country's social climate as key factors in their decision. Meanwhile, foreign investors are also expressing concerns about labour strife, high taxes, and stifling red tape in the public sector, which they see as barriers to investment.

Key Takeaways:

  • 87% of French individuals and 73% of small shareholders are hesitant to invest in new privatizations or IPOs, according to a poll conducted for BNP-Paribas.
  • The sale of a 35% stake in Snecma, a state-owned aero-engine manufacturer, is expected to raise between €1.6bn and €2bn.
  • French citizens are citing company strategies and the country's social climate as key factors in their decision not to invest in privatizations or IPOs.
  • Foreign investors are expressing concerns about labour strife, high taxes, and stifling red tape in the public sector, which they see as barriers to investment.
  • EdF employees' recent street protests are seen as a major concern for investors.
  • Labour strife, high taxes, and red tape are major concerns for foreign investors considering investing in France.
  • The French government's promotion efforts are unlikely to stimulate inward investment or encourage French investment in new state asset sales as long as state workers continue to protest against privatization.

Statistics:

  • 87% of French individuals and 73% of small shareholders are hesitant to invest in new privatizations or IPOs (Source: BNP-Paribas).
  • €1.6bn-€2bn: expected revenue from the sale of a 35% stake in Snecma (Source: French government).
  • 35%: percentage of stake being sold in Snecma, an aero-engine manufacturer (Source: French government).
  • 87%: percentage of French individuals hesitant to invest in new privatizations or IPOs (Source: BNP-Paribas).
  • 73%: percentage of small shareholders hesitant to invest in new privatizations or IPOs (Source: BNP-Paribas).

Sources:

  • BNP-Paribas: poll conducted for the bank (Source not explicitly dated, but likely recent).
  • French government: expected revenue from Snecma sale (Source not explicitly dated, but likely recent).
  • EdF: employees' recent street protests (Source not explicitly dated, but likely recent).

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