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In the majority of cases, sellers of French companies seek to promote competition between bidders by holding auctions. Selling a private company via an auction in France begins with sellers staging a brief presentation. Upon signing an NDA, participants get access to an info memorandum, using which they provide sellers with letters of interest. Concluding an M&A deal in France usually takes from 90 to 150 days.

M&A Deals in France: Regulation

Purchasing & selling a French company is regulated by contract law; also, other legislation can be applicable. Transferring strategic assets to non-French investors in France requires getting prior approval from the Economic Ministry.

If one or more purchasers aren’t from France or assets to be bought are in different jurisdictions, it’s possible to conduct an M&A transaction in France pursuant to laws of other countries (the only exception is deals involving real estate).

France: Obtaining Ownership of Shares

Normally, acquisition of ownership of assets or stakes entalis transfer of all powers associated with them. Transferring ownership of French companies’ assets takes place either upon concluding an M&A contract in France or pursuant to mandatory contractual/statutory terms.

Transferring ownership of French companies’ shares is done via registration with the Company Register. Non-listed securities can be transferred by means of DLT.

Acquiring shares of private French companies involves renegotiating restrictions relating to regulatory or contractual terms of transfer. Failure to meet them may entail imposition of sanctions.

French legislation doesn’t differentiate between beneficial & legal ownership; however, some concepts are defined as follows:

  • trust management – when assets, guarantees or rights get transferred to 3rd parties, which the latter must manage on beneficiaries’ behalf;
  • stakeholders' rights get divided between ordinary & beneficial owners (with the latter deriving profit from assets).

By purchasing a French company, buyers are automatically transferred any & all liabilities & assets associated with it; the only exception is made for contracts concluded on the intuitu personae basis & those of them that require approval of other participants.

Local authorities can raise objections to concluding M&A deals in certain sectors. They may also exercise their veto power & impose certain requirements. Failure to comply with these restrictions may lead to penalties.

Concluding M&A deals in some industries (e.g. insurance telecommunications & banking) can require approval of regulatory authorities. In particular, investors may be required to comply with these criteria:

  • companies taking part in an M&A deal in France must have a gross turnover exceeding hundred fifty million euros;
  • each of the companies participating in an M&A transaction must have a gros turnover exceeding fifty million euros;
  • an M&A transaction mustn’t be regulated by the EU M&A legislation.

Looking to purchase a company in France? Need advice on conducting an M&A transaction in France? Why not contact IQ Decision UK?