This is the inaugural edition of this news service’s France Deals Pulse, a regular column looking at the hottest dealmaking trends in French capital markets.

French cinema might be the most artistic form of moviemaking, but everyone knows to become a true star you must break the US. The rule for the doyennes of French film is also true for cash rich French businesses seeking global leadership.

With political uncertainty raging in Paris, French strategic buyers are now even more encouraged to press ahead with expansion plan in the US.

This is starting to move the needle and increase French and US cross-border deal flow.

After the record low of 2022 with EUR 3.4bn across 60 deals, the value of France outbound M&A in the US more than quadrupled in 2023 across the same number of deals according to Mergermarket data. So far this year the trend remains stable with a value of EUR 12.3bn across 58 deals, data show. But the pipeline of potential deals seems a bit more dynamic, bankers and lawyers agreed.

Limited domestic growth perspectives – an expected 0.7% GDP growth for 2024 according to Eurostat- and the protracted talks on the next French government have encouraged this uptick in outbound M&A to the US, bankers and lawyers agreed.

However, only large, listed companies, less exposed to the French market, can have that flexibility to seek growth overseas when the domestic market is sluggish, a banker said.

For now, it is mostly France’s public, flagships firms that have embarked on a conquest of the West. This includes aerospace specialist Safran which announced recently it planned to acquire US aircraft parts specialist Component Repair Technology.

It is the French giants, like LVMH, Total or Saint-Gobain, that generate the largest share of French M&A revenues outside of France, he added.

However, the confirmed preliminary merger talks between French office supplies specialist Elis and its US peer Vestis is a deal on everybody’s lips in Paris.

If this listed, mid-cap, firm with a market cap below EUR 5bn manages to close a big purchase in the US, this would encourage other comparable French companies to try, an ECM banker said.

The Elis approach has so far not been well received by the market; the stock lost more than 20% after the preliminary talks were confirmed. But the industrial rationale behind an acquisition in a sector, where the revenue growth rate for local peers is around 6%, could convince investors over the mid-term, this news service reported earlier.

In the US, where the expected GDP growth for 2024 is around 3%, regulatory pressure is also less intense, a Paris-based M&A lawyer said.

In a country as large as a continent, market definitions are clearer and there is a pro-business agenda not constantly questioned by the government. Whereas in Europe, for some key industries like telecom, competition is still assessed in each member state. You have many more competitors but fewer M&A opportunities, this lawyer added.

The snap French elections this summer ended up in a hung parliament. But whatever the government formed this week, the pro-business agenda deployed for around seven years by Emmanuel Macron will be tamed, several M&A experts said.

The nomination of Michel Barnier, the former EU Brexit negotiator, multiple-time commissioner and French minister, as prime minister, may have been a reprieve for markets and the European business community, but it will be a brief one.

With France’s deteriorating credit situation, a big political fight ahead for the budget vote next month will raise tension for dealmakers who will fear potential tax hikes and legal uncertainty.

The uptick in cross-border M&A is at least ready to be sustained in the coming months.

When there is trouble at home, the pursuit of stardom across the seas looks very attractive indeed.