A prominent U.S.-based investment fund headquartered in Washington, D.C., entrusted Relians with a highly sensitive mandate: managing the sale of a French industrial company specializing in the manufacturing of axles for military vehicles. The prospective buyer, a foreign investor, was seeking to acquire the business, which operates in a sector classified as strategic due to its direct connection to France’s national defense capabilities.
Context and Challenges
In France, transactions involving companies deemed essential to national interests—particularly in defense, energy, and critical technologies—are subject to strict oversight under the Foreign Direct Investment (FDI) screening mechanism. This regulatory process, governed by Article L151-3 of the French Monetary and Financial Code, is designed to safeguard national security and sovereignty.
This specific transaction presented multiple layers of complexity:
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The target company operated in the defense sector, supplying critical components—axles—for military-grade vehicles.
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The deal was subject to a mandatory prior approval process overseen by the French Ministry of the Economy.
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A tight and non-negotiable deadline was in place to close the transaction before the seller’s fiscal year-end.
The dual challenge was clear: to navigate a highly sensitive and detailed regulatory framework while ensuring swift execution under considerable time pressure.
Our Mission
Acting on behalf of the selling fund, Relians was engaged to lead the full Foreign Investment Review (FIR) process under constrained and high-stakes conditions. Our mission was structured around two core pillars:
Our team began by conducting a thorough assessment of the target company’s operations, focusing on the security implications of its technology and industrial output. The firm’s involvement in producing advanced axle systems for military vehicles significantly elevated the level of regulatory sensitivity, given the strategic nature of these components and their potential military applications.
This comprehensive strategic review enabled us to anticipate potential red flags from regulatory bodies. We prepared a targeted and well-structured submission package, articulating the transaction’s alignment with French national interests and preemptively addressing concerns around defense capabilities, technology transfer, and continuity of supply.
By presenting a proactive, informed narrative, we accelerated regulatory engagement and minimized delays in the authorization process.
Relians led all communication and negotiation efforts with the French government, including the Ministry of the Economy and intelligence services such as the General Directorate for Internal Security (DGSI). Our objective was to obtain FIR authorization swiftly while maintaining strict compliance with regulatory expectations.
To achieve this, we developed and executed a clear and transparent institutional communication strategy aimed at fostering trust and demonstrating our client’s willingness to fully cooperate with French authorities. This included showcasing the investor’s commitment to preserving the company’s industrial footprint and strategic capabilities within France.
We also maintained constant alignment between all stakeholders—buyer, seller, legal counsel, and government entities—to ensure continuity, mitigate risk, and keep the transaction moving forward without compromising security or compliance.
Additionally, we advised on the optimal deal structure to satisfy all regulatory and legal conditions tied to the FIR process, ensuring the transaction was sound from both a legal and strategic standpoint.
Results
Thanks to our hands-on, coordinated approach, FIR approval was secured in record time. This enabled the transaction to close in accordance with the seller’s fiscal deadlines, avoiding delays that could have disrupted financial planning and investor relations.
The transfer of ownership was completed successfully under conditions that preserved the company’s strategic role within the French defense sector and ensured long-term alignment with national interests.
Key Takeaway
This case highlights the critical role of expert advisory in navigating foreign investment control mechanisms—particularly in sensitive sectors like defense, technology, and infrastructure. Without the right strategy and institutional navigation, such transactions risk prolonged delays, rejections, or unintended national security concerns.
At Relians, we specialize in managing complexity at the intersection of business, government, and sovereignty. Our expertise empowers clients to approach sensitive transactions with clarity, confidence, and full regulatory compliance. Whether you’re divesting or acquiring a strategic asset, we ensure that your operation is not only permitted but also positioned for long-term success in a highly regulated environment.
