From shadow to full light. Segault is this French SME with 80 employees until now unknown to the general public. Specialized in industrial valves for nuclear boiler rooms, she is on her way, according to her The galeryto pass under the American flag with the takeover bid of its parent company, the Canadian Velan, by the Texan group FlowServe, valued at more than 4,000 million dollars on the New York Stock Exchange.
The proposed amount is 325 million Canadian dollars, or approximately 220 million euros. The sale must be finalized before the summer. In France, more and more voices are being raised to prevent this transaction, which would be a severe blow to defense industrial sovereignty. Explanations.
• Who are Segault and its owner Velan?
Founded in 1921, Segault is an SME with 80 employees and a turnover of 25 million. Based in Essonne, it has world-renowned expertise in valve systems for nuclear boiler rooms. These systems equip power plants, but also nuclear-powered military vessels such as submarines (SNA and SNLE), the Charles de Gaulle aircraft carrier and its successor in preparation. In aeronautics, it also supplies the security system for M51-type nuclear missiles that arm nuclear-powered ballistic missile submarines (SNLE).
Velan acquired Segault in 2007. Listed on the Toronto Stock Exchange, this group employs 1,650 people and has factories in nine countries. The group was founded in 1950 by Karel Velan, who died in 2017 at the age of 99. He has three children, too old to take over the business. This specialist equips nuclear submarines and aircraft carriers of the US Navy.
“It is a safe bet that the new generation of 12 grandchildren and 15 great-grandchildren will be less attached to the family business,” says LaFinance.com, the Quebec financial site to explain the sale to FlowServe.
In France, Velan has another subsidiary in Lyon. Also specializing in nuclear valves, Velan SAS has nuclear power plants around the world, including Flammanville in France.
• What does Flowserve, the future acquirer of Velan, make?
Flowserve is one of the world’s leading providers of fluid motion and control products and services. This New York-listed group is active in 50 countries. Produces industrial pumps, seals and valves. In France, it had a control valve production plant located in Thiers (Puy-de-Dôme). This site closed in 2016 following a global reorganization plan aimed at reducing the workforce by 20%, that is, the elimination of 3,400 employees, including about 100 in France.
In a press release, the group explains that the acquisition of Velan is part of a diversification strategy due to its “solid positioning in the nuclear, cryogenic, industrial and defense markets and its portfolio of highly complementary products”.
• ITAR and the Paris Act, threats to the sovereignty of the French defense?
By becoming American, the Segault SME could fall under the US ITAR (International Traffic in Arms Regulations) that regulates the sale of arms. Washington would thus have a say in the sale of foreign systems using US technology and could veto a contract.
Clearly, in order to sell a French nuclear submarine, the agreement of the United States would be required. Such a situation could seriously harm Naval Group, which builds nuclear submarines for the French Navy and sometimes competes with US groups.
Another risk is the Patriot Act, which allows the US government to request any information from any US company, without judicial authorization or the slightest motivation, in the framework of unilateral investigations beyond all control, carried out by its external information. For Arnaud Montebourg, who protests against this sale, it would simply be an “espionage activity”.
• Why are parliamentarians and the executive mobilizing?
The acquisition of Velan, and thus Segault, by Flowserve triggered a national mobilization and became a political issue. In recent days, several elected officials, including Sophie Prims (LR), Jean-Louis Thiériot (LR), Olivier Marleix (LR), Marie-Noëlle Lienemann (Republican and Socialist Left) or José Gonzales (RN) are asking the government to intervene to prevent the sale. On her site, Marie-Noëlle Lienemann (PS) questions the government on the subject.
“This operation will be subject to the foreign investment control procedure. We are perfectly vigilant because Segault is a strategic company,” the delegate minister for Commerce, Olivia Grégoire, tried to reassure in the National Assembly during questions to the government.
• Is a “bailout” possible?
The government takes the risks to French defense industrial sovereignty very seriously. As the Ministry of the Armed Forces told us last week, “the search for a French buyer is underway. So the mass is not said”. This work is carried out jointly with Bercy.
Among the candidates for a Segault takeover, former minister Armand Montebourg who launched a platform of “made in France” products. He is calling on the government to block the takeover and has rallied around him investors ready to make a takeover offer. His company, “Made in France equipment“, and the investment company Otium Capital, “have joined forces to launch a fund project, the Private Sovereign Fund for Industry and Agriculture” dedicated to industrial and agrarian sovereignty.
• What does Segault say?
To block the sale to Flowserve, Arnaud Montebourg relies on the “Alstom” decree of May 14, 2014 regarding foreign investments subject to prior authorization. Can it be applied to a company of French origin that has belonged to a Canadian group for 16 years?
And while Montebourg’s offer is financially sound and government-backed, it remains subject to decisions not made by Segault, but by Velan. Will the holding company agree to withdraw the French SME from the transaction with Flowserve? And if it did, wouldn’t the Texan group, which makes no secret of its intention to diversify into nuclear and defense, be tempted to revise its offer?
We tried to clarify these points with Segault. The company has let us know that it cannot comment on the matter and has referred us to its parent company Velan, the only one authorized to say more about the outcome of this case.
Source: BFM TV
