The reasons why French companies are investing more and more in the United States

The U.S. economy continues to excel amid a challenging global economic landscape. With growth five times that of Europe in 2023, the United States has become a magnet for French companies seeking to expand and take advantage of new investment opportunities.

Large French business groups such as Hermès, LVMH, Kering and L'Oréal have long chosen to establish themselves firmly in the United States, taking advantage of the country's growth opportunity. However, according to a report from Le Figaro, this trend has been increasing after the global health emergency caused by the coronavirus.

Samy Chaar, chief economist at Lombard Odier Bank, explains that the American market exhibits a much more vigorous dynamic than the European one. While American households show a notable enthusiasm for spending, Europeans tend to have a greater propensity for saving.

Another relevant aspect is the rise in shale gas production, which has made the United States the primary energy producer worldwide. This has led to energy costs that are considerably lower than those in Europe.

Significant investments by French companies

Food industry giant Lactalis made a notable acquisition in 2020 by purchasing food company Kraft-Heinz for nearly $3 billion. Taking advantage of the American preference for cheeses such as cheddar, mozzarella, and other hard cheeses, the United States has become the third-largest market for this company. In addition to this acquisition, Lactalis is taking advantage of its presence in North America to develop and promote its flagship brands, adapting recipes to meet local tastes. This strategic approach has allowed the French organization to own 5% of the U.S. dairy market.

Saint-Gobain, a leader in construction materials, is another French company expanding its operations in the United States through strategic acquisitions such as the purchase of Continental Building and GCP for €1.3 billion and €2 billion, respectively, in 2019 and 2021. Now, 32% of Saint-Gobain's operating income comes from North America.

French companies have also targeted the U.S. automotive market, with suppliers such as Plastic Omnium, Valeo and Michelin establishing a strong presence there.

North America has also become the most important region for French chemical giant Arkema, which accounts for 37% of its sales, and for energy technologies company Schneider Electric, which accounts for 34% of its sales.

In addition, French companies have taken advantage of the subsidies provided by the U.S. Government for foreigners to invest in specific sectors such as hydrogen and renewable energies. In fact, companies such as TotalEnergies, EDF and Engie are already investing in solar and wind energy projects.

This trend is expected to continue in the coming years, as the United States remains an attractive destination for French companies seeking growth and business opportunities.

"The United States has, and will continue to have, many positive factors in its favor, such as strong local demand, geopolitical stability and very competitive energy costs," said Olivier Duval, associate director of Alvarez and Marsal, a global consulting and services firm for large companies.