Blocking the Sale of Certain Eutelsat Assets and Conditional Approval of LMB Aerospace

Blocking the Sale of Certain Eutelsat Assets and Conditional Approval of LMB Aerospace: Comparative Analysis of the French State’s Position on Nationally Sensitive Activities

In these two cases that have stirred the national economic and political scene regarding sovereignty, the French State’s stance is based on the regulation of foreign investment control in France. Notably, these operations were not assessed under the framework of merger control.

Source: Ms. Pauline de Lanzac, Partner Lawyer, and Mr. Victor Delannoy, Lawyer
Latournerie Wolfrom Avocats, 75008 Paris, France
Date: 2 February 2026

1. Context of the Transactions

Eutelsat
Eutelsat, a European satellite telecommunications group headquartered in France, had planned to sell part of its ground infrastructure — including antennas and connectivity circuits located on French territory — to the Swedish investment fund EQT Infrastructure VI. Initially announced in 2024, this transaction was expected to generate approximately €550 million for Eutelsat and involved transferring these assets to a new entity majority-owned by EQT. Additionally, at the end of 2025, the French State increased its stake in Eutelsat to 29.13% via the State Shareholding Agency (Agence des Participations de l’État).

LMB Aerospace
LMB Aerospace is a French manufacturer of aviation and defense components, supplying, among other products, fans and integrated systems for Dassault Aviation’s Rafale aircraft. The sale of the company to the American firm Loar Group was authorized, subject to guarantees ensuring the maintenance of operations and strategic capabilities in France.

2. French State Intervention and Decisions

Eutelsat
The French Minister of the Economy, Roland Lescure, blocked the sale of Eutelsat under the State’s foreign investment control mechanism, which specifically targets the disposal of sensitive assets. The ground antennas were deemed too strategic to be sold to a foreign investor, as they serve not only civil communications but also military applications.

LMB Aerospace
The French State authorized the sale of LMB Aerospace to Loar Group under strict conditions: continuation of activities in France, compliance with contracts with French military companies, control of certain critical capabilities for national defense, and the probable implementation of a “Golden Share” held by the State Shareholding Agency. This Golden Share grants the State veto power over certain strategic decisions and the right to representation within the company’s governance bodies.

3. Rationale Behind the French State’s Decisions

Eutelsat
a) National sovereignty: The ground antennas are strategic assets for digital sovereignty and communications, particularly as Eutelsat is the main European competitor to Starlink.
b) Military communications security: These infrastructures serve both the armed forces and commercial services, reinforcing their strategic importance.
c) Nature of the assets: The government clarified that the veto was not based on the investor’s nationality but on the intrinsically strategic nature of the assets concerned.

LMB Aerospace
Authorization was granted because, although the company is strategically important for defense, the transaction does not compromise national sovereignty. The operation’s criticality was considered insufficient to justify a veto, particularly as LMB Aerospace represents only about 10% of the militarized fan market and is not the sole French player in this segment. The operation is nevertheless subject to strict conditions to ensure the continuity of activities in France.

4. Consequences and Reactions

Eutelsat

• The transaction, originally announced in August 2024, will not proceed.
• Eutelsat’s stock price declined, reflecting the economic impact of the block.
• The decision reignited debate on the protection of strategic assets in France.
• EQT indicated in a press release that it intends to continue pursuing opportunities in space infrastructure despite the veto.

LMB Aerospace

• The transaction was approved under conditions, with operations maintained in France.
• The decision is perceived as a compromise between openness to foreign investors and protection of French strategic interests.

5. Legal Mechanisms Employed by the Government

The French State’s intervention does not fall within the framework of merger control. Instead, it relied on the legal framework governing foreign investment control in France, which allows the State to block or authorize, subject to conditions, foreign investments affecting sensitive activities or assets essential to national interests.

Eutelsat
Sensitive civil and military ground infrastructures, such as Eutelsat antennas, fall within this scope. Their strategic significance prompted the Minister of the Economy to block the transaction. In principle, this decision may be subject to administrative appeal.

LMB Aerospace
The same legal tools were applied, but the operation was deemed compatible with French interests due to commitments imposed on the buyer, including the maintenance of activities in France and control over critical capabilities, reinforced by the implementation of a Golden Share held by the State Shareholding Agency. Pursuant to Article L.151-3-1 II of the French Monetary and Financial Code, failure to comply with these commitments may trigger administrative, financial, or criminal sanctions.

6. Comparative Summary

7. Conclusion

France opted to protect its essential strategic infrastructures, such as Eutelsat’s ground antennas, by blocking their sale to a foreign fund under the foreign investment control regime.

Conversely, it authorized the sale of LMB Aerospace to an American investor under strict conditions, complemented by the implementation of a Golden Share held by the State Shareholding Agency. These decisions illustrate the distinction made by the French State between critical infrastructures requiring direct control and strategic companies that may open to foreign capital under robust guarantees, while underscoring the increasing importance of governance tools in French economic sovereignty.