PARIS – France's new Public Investment Bank will usually buy minority stakes in French firms but could take a majority holding to prevent a foreign takeover, its managing director Nicolas Dufourcq said on Wednesday.
The bank, set up at the start of this year to fulfill an election promise of Socialist President Francois Hollande, aims to invest 9.2 billion euros ($11.8 billion) in French companies through 2017.
Dufourcq told a parliamentary hearing that in the case of a foreign takeover, "we could imagine temporarily taking a majority stake while French investors are sought and then reverting to a minority stake after a year." He added that such investments were likely to be rare.
Hollande won power a year ago on promises to kick-start the economy - the euro zone's second largest - and hold down unemployment. However, France was officially declared on Thursday to have entered a shallow recession in the first three months of this year.
Though eager for foreign investment, successive French governments have been wary of foreign takeovers.
Hollande's government blocked Yahoo's planned acquisition of the Dailymotion video-sharing website owned by France Telecom , though the move divided ministers.
Dufourcq said the fund could mobilize a further 2.7 billion through specialized investment funds and would target the bulk of its investments at small and mid-sized firms currently struggling to gain bank financing and capital.
He has come under fire from the bank's vice president, Segolene Royal, a senior Socialist politician and one-time presidential candidate who has called for the bank to help prop up struggling industrial companies.
Dufourcq did not rule out taking stakes in large companies in limited cases, as one of the bank's predecessors, the FSI French sovereign wealth fund, did with Danone and auto parts group Valeo .
(Reporting by Yann Le Guernigou; Writing by Leigh Thomas; Editing by Ruth Pitchford)