Arnaud Montebourg has a huge responsibility now. He’s France’s minister of the economy, industrial renewal, and the digital economy. He just signed a decree that allows the government to prevent acquisitions of French companies by foreign firms in multiple industries, including “electronic communications”. As a reminder, he’s the one who killed Dailymotion’s acquisition by Yahoo. Does this portend that he’s going to kill more startup acquisitions in the future?
Originally, this decree had nothing to do with startups. General Electric wants to acquire Alstom, and Montebourg wants to avoid handing out this French company to American shareholders. To be fair, other countries, including the U.S., have similar tactics and block acquisitions from time to time.
Yet, the decree also talks about potential acquisitions in the “electronic communications” industry — whatever it means. As Montebourg has set a bad precedent with Dailymotion, one could fear that he won’t let French entrepreneurs sign with American tech companies.
Yahoo wanted to pay $270 million (€200 million) to acquire YouTube competitor Dailymotion. It would have been a great exit for the startup. “Dailymotion is considered a marquee company in France’s technology industry. Hence, Montebourg didn’t want to let it go to the Americans,” a source told TechCrunch at the time.
But I’m using this outlet to personally beg Montebourg: please don’t kill French startup acquisitions. It would be the worst thing to do for the French tech ecosystem.
The exit market in France is small. Criteo, which was founded in France, has been acquiring advertising technology startups for the last few months. Other than that, you have to look for an American buyer if you want to sell your company — Google, Yahoo, Facebook, etc.
If you prevent French startup acquisitions, there will be no incentive for VCs to invest in French startups — IPOs, the other possible exit, are still moonshots. Moreover, acquisitions are a great way to create business angels who give back to the ecosystem, role models for aspiring entrepreneurs, and more.
I hope that today’s decree was primarily focused on Alstom’s acquisition. Let’s leave startups alone. Just last week, TripAdvisor acquired reservation service LaFourchette for $140 million (€100 million). The government didn’t have a say. We need more acquisitions like this one.