France is looking at ways to prevent Velan SAS, a domestic supplier of parts for nuclear reactors, from falling into US hands as it aims to protect a strategic industry.

The business is a French unit of Quebec-based Velan Inc., which is being taken over by Flowserve Corp. in an all-cash transaction valued at about C$329 million ($247 million). The deal was expected to close by the end of the second quarter and has been delayed.

French nuclear-submarine parts supplier Segault SAS has already been carved out of that deal following government efforts to bring a key technology …