Technology M&A 2026 Comparisons

In France, the technology M&A market has remained active, with a higher number of deals but an overall lower amount in value compared to 12 months ago, mainly concentrated around artificial intelligence and digital infrastructure.

Rising interest rates, economic uncertainty and stricter financing conditions have made investors more cautious, particularly in growth-stage ventures. However, strategic buyers and private equity funds remain active, focusing on profitable and scalable businesses in sectors such as software as a service (SaaS), fintech, cybersecurity, and health tech.

To illustrate this trend, in August 2025, the French State announced the acquisition of Atos’ Advanced Computing division, which designs and manufactures high-performance servers and supercomputers. The unit employs over 2,500 staff, mainly in France. It had 2025 revenue of EUR800 million, the enterprise value is EUR410 million, including EUR110 million in earn-out, and closing is expected in early 2026.

The French M&A market has been gradually recovering following a challenging 2023 and subdued 2024, though the recovery has not yet gained significant momentum: since the beginning of 2025, M&A transactions involving at least one French company have risen by 2% in value, and by 1% in volume. The market is driven by French buyers acquiring foreign companies. Examples includes Publicis Groupe (listed on Euronext Paris) which announced in March 2025 the acquisition (subject to usual closing conditions) of the US company Lotame, a major player in data and digital identity, as part of its strategy to accelerate growth in AI. Lotame is recognised for its solutions for collecting, managing and activating customer data, as well as its digital identity technologies, which enable more precise and personalised advertising campaigns while maintaining data privacy compliance.

The French technology sector is doing rather well, with record new funding. Examples include Mistral AI, which raised EUR1.7 billion and reached a valuation of nearly EUR12 billion, and Filigran, a cybersecurity company, which completed a EUR50 million financing round in October this year.

Although the acquisition of French companies remains attractive (the overall number having increased by 8% since 2024, with foreign buyers having increased by 7% since 2024), the overall acquisition value has dropped by 19%.

In short, private M&A continues to drive overall activity, with investment funds focusing on mid-cap transactions and more extensive due diligence, while mega-deals have become increasingly rare. Market friction stems from a disconnect between seller price expectations and buyer willingness to pay, with buyers no longer accepting the high multiples seen in 2020–2021.

Concerning public M&A, the friendly takeover bid launched by Bridgepoint and General Atlantic over Esker illustrates private equity funds’ growing interest in French software publishers. Announced in September 2024, the transaction valued the French company specialised in document dematerialisation at approximately EUR1.62 billion. The deal was successfully completed in early 2025, resulting in Esker’s delisting in March 2025, after the consortium reached 92.93% of the company’s share capital.

France has relatively attractive company law in Europe, characterised by great flexibility and increasing digitalisation, which speeds up the formalities involved in setting up a company. This is why it is generally preferable to set up a company in France rather than in another jurisdiction.

Establishing a New Company in France

In France, establishing a new company involves two distinct steps, namely: (i) its incorporation; and (ii) its registration.

Incorporation

The incorporation of the company involves the drafting and signing of the articles of association by the partners or by a sole partner. The company exists as soon as the articles of association are signed, but does not have a legal personality. However, the partners may enter into legal acts on behalf of the company in formation, and these acts may be automatically taken over by the company upon its registration.

Registration

The registration of the company requires the filing of the signed articles of association and other formal documents with the clerk of the commercial court. From the date of filing, it takes between four and ten days for the company to be registered, depending on the commercial court involved.

Minimum Capital Requirement

France has long since abolished any minimum share capital requirement, particularly for a small limited liability company (société à responsabilité limitée or SARL) and simplified joint-stock company (société par actions simplifiée or SAS). Conversely, a minimum share capital requirement of EUR37,000 remains for a public limited company (société anonyme or SA).

Entrepreneurs are generally advised to set up a simplified joint stock company (SAS).

The regime of the simplified joint stock company is based on the public limited company (SA), but enjoys almost complete freedom in its internal organisation. Indeed, it is largely the articles of association that set out the rules for the internal functioning of the company, with the law establishing only a few isolated rules.

Entrepreneurs therefore have considerable freedom to establish the management and organisational conditions they desire and that are best suited to their situation, while taking into account the interests of potential financial investors.

Following this initial bootstrap phase, start-ups progress to seed investment, which represents the first institutional round of financing. At this stage, the primary players are venture capital funds specialising in early-stage investments and crowdfunding platforms, which have become increasingly popular for validating business concepts while raising capital.

France boasts a robust venture capital ecosystem with over 450 active funds, creating a highly competitive environment for start-ups seeking investment. This intense competition among funds can work to the advantage of entrepreneurs, as investors compete to identify and back the most promising ventures.

The amounts raised can be substantial for the most promising start-ups. For instance, Poolside, a French unicorn founded in 2023 and specialising in AI-driven code generation, raised USD500 million in October 2024, enabling the company to accelerate the development of its natural language-based code generation technology.

Investment is generally made through the fund acquiring a stake in the company’s capital after reviewing the company and its business plan. The investment fund then subscribes to common or preferred shares and may also grant shareholder loans. Relations between the founder and investor are governed by a shareholders’ agreement.

France boasts an extensive investment fund landscape, comprising predominantly French, European and American funds. The ecosystem includes over 450 venture capital funds operating across distinct market segments, including infrastructure, French tech, impact investing, family offices, and business angel networks.

This diverse funding environment provides start-ups with access to specialised investors who bring not only capital but also sector-specific expertise and networks. The segmentation allows entrepreneurs to target investors whose investment and strategic focus align closely with their business model and growth objectives, while investors can concentrate their resources and knowledge within their areas of specialisation.

In addition to traditional investors, the French public investment bank (known as Bpifrance) is a major player in the financing of start-ups in France. In the innovation and development capital segments, Bpifrance acts as a direct, minority, active and long-term investor through equity or quasi-equity investments. The company is thus accompanied and supported in its growth.

France does not have standardised contractual or corporate documentation at the national or regional level.

However, standard market practices are widespread and regularly used in venture capital and private equity transactions. The venture capital legal market is concentrated among a small number of highly specialised corporate law firms. These firms handle a substantial proportion of investment transactions, enabling them to establish standardised market practices regarding transactional documentation, and thereby reducing negotiation friction and transaction costs.

As indicated elsewhere in this section, a simplified joint stock company (SAS) enjoys considerable freedom in its internal organisation. Thus, when there is a desire or a need to modify the internal organisation of the company, the articles of association are generally amended or redrafted, without any change in corporate form.

For example, the entry of a financial investor may involve the establishment of a board of directors of which that investor will be a member. In such cases, upon completion of the investment, the articles of association are generally amended in depth in order to rewrite the internal governance rules and adapt them to the desired situation.

When investors in a start-up are looking for a liquidity event, they would be more likely to expect a sale process of the start-up rather than taking the company public and listing it on a securities exchange. The number of IPOs has declined somewhat in France, due in particular to greater selectivity on the part of investors and a geopolitical and commercial environment that is not conducive to this type of transaction.

In the event that a French company decides to launch an initial public offering, it would be more likely to pursue a listing on a French stock exchange than a foreign exchange.

A listing on Euronext Paris presents distinct strategic advantages, including enhanced market credibility within France, improved access to domestic investors who are comfortably familiar with the company’s brand and operations, streamlined compliance with French and EU regulatory requirements, and reduced listing costs and administrative burden compared to cross-border listings.

The choice by a French company to list on a foreign exchange could impact the feasibility of a future sale, particularly regarding a squeeze-out mechanism.

Under French law, following a successful tender offer, a bidder holding 90% of the share capital and voting rights may compel the remaining shareholders to sell their securities at the offer price.

However, this squeeze-out right is only available for takeover bids conducted under French regulations and supervised by the French Financial Markets Authority (Autorité des marchés financiers or AMF).

Therefore, listing abroad would likely remove access to France’s statutory squeeze-out mechanism, potentially leaving minority shareholders indefinitely in place and complicating the full-ownership transfers necessary for restructuring or tax-consolidation purposes.

The structure and execution of a corporate sale process is largely determined by the seller’s profile.

Where the seller is an investment fund holding a majority stake, the transaction typically proceeds through an open auction process.

Conversely, when the sale is initiated by an investment bank, the process generally takes the form of a controlled or targeted auction involving a limited number of pre-selected potential acquirers.

In France, the prevailing transaction structure for the disposal of privately held technology companies with venture capital backing is a share purchase agreement encompassing the entire issued share capital. Venture capital investors typically favour complete exit strategies to maximise returns on investment.

Notwithstanding this general approach, in certain circumstances – particularly where the acquirer is a strategic investor or established technology enterprise – venture capital funds may negotiate to retain a minority equity position where significant future value-creation potential is anticipated.

The current market trend, however, favours full acquisitions, which streamline corporate governance structures and ensure alignment of interests between the acquiring entity and the executive management.

In France, most transactions are structured as cash deals rather than stock-for-stock transactions. The most common form of acquisition, especially for larger businesses, is the purchase of shares, and most commonly, the purchase price is paid in euros.

However, a consideration by way of shares is also possible. Offering a consideration in kind is often complex and requires a thorough review of the value of the offeror’s shares and of the offeror itself. In certain situations, the bidder must offer an alternative consideration in cash.

Purchase price adjustments are common, typically stated on a “cash-free debt-free” basis with adjustments based on target working capital. Combinations of cash and deferred consideration mechanisms such as earn-outs are sometimes used, particularly in smaller transactions or where management continuity is key.

In early venture financing rounds, founders often provide personal representations and warranties (“back-up” reps) covering both company-related and personal matters. However, these obligations typically disappear after the Series A stage as founders’ knowledge becomes less comprehensive.

In exit transactions, venture capital investors usually limit their warranties to ownership and authority to sell their shares, avoiding broader business liabilities. Founders may still bear limited post-closing indemnification exposure, particularly for specific risks such as tax, environmental, or employee-related matters.

Customary M&A practice includes an escrow or holdback for 12–24 months to secure indemnification obligations. However, the growing use of warranty and indemnity (W&I) insurance has reduced escrow amounts. W&I insurance provides coverage for breaches while allowing sellers faster access to proceeds, usually with a deductible of up to a certain percentage of transaction value.

Spin-offs are customary in France’s technology industry. Major research institutions actively encourage and support spin-off creation, in cutting-edge fields like AI or digital trust.

Academic spin-offs have developed considerably in France since the 2000s, with academic incubators supporting more than 4,000 companies over 15 years.

Key drivers for considering a spin-off include:

• technological capabilities and the ability to commercialise innovative products to meet market needs;
• the acquisition of marketing skills, access to financing (both public and private), entrepreneurial orientation, and support programmes from academic incubators; and
• to help bring new technologies to market by scaling them up and creating products that satisfy unmet market needs.

Spin-off transactions in France may benefit from tax-neutral treatment at both the corporate and shareholder levels pursuant to Article 210 B of the French Tax Code. This elective regime provides comprehensive tax deferral, subject to strict compliance with statutory requirements.

At the Corporate Level

At the corporate level, the transferred assets must constitute a complete and autonomous branch of activity (branche complète d’activité) capable of independent operation utilising its own resources. The transaction must be supported by valid commercial rationale and not be primarily motivated by tax avoidance considerations. Furthermore, the structural terms must preserve the French tax authorities’ ability to tax deferred capital gains upon future realisation.

At the Shareholder Level

At the shareholder level, roll-over relief is available, enabling shareholders to defer taxation until the subsequent disposal of shares received in the spin-off entity. Shareholders with qualifying stakes of at least 5% of voting rights are subject to a mandatory three-year holding period.

Regarding registration duty, since 1 January 2019, qualifying spin-off transactions have benefited from an exemption from registration duty.

Under French company law, it is possible to have a spin-off, immediately followed by a business combination. However, such a transaction must not be carried out for tax purposes alone. Although a spin-off followed by a combination can be legally carried out, the tax theory of abuse of rights could allow the tax authorities to reverse the tax consequences of the transaction if they consider that it was carried out for the sole purpose of avoiding a certain tax burden.

The abuse-of-rights theory is applicable to artificial arrangements or transactions that exploit technical interpretations of regulations in ways that contradict their intended objectives; their only purpose being to circumvent or minimise the tax burden that would ordinarily arise from the individual’s genuine situation or business activities.

In such cases, the tax authorities will adjust the relevant amounts and impose certain penalties.

Corporate reorganisations including spin-offs have different levels of legal constraints and imply different timings. Consequently, the timing of such a transaction depends primarily on the preparation of legal and tax documentation, as well as the completion of the various necessary legal and tax steps and formalities.

From a legal standpoint, it may be necessary, for example, to consult the works council before committing to the transaction, which can cause a delay of one to two months. Other formalities, such as the filing of legal documentation with the commercial court and its validation by such court, are in practice subject to longer delays of three, to up to five months.

Regarding tax rulings, since January 2018, cross-border spin-offs involving a complete and autonomous branch of activity are automatically eligible for the favourable tax regime, without requiring prior approval from the French tax authorities. However, when the transferred assets do not represent a complete line of business, an advance ruling from the French tax authorities is still required.

When a tax ruling is requested, the French tax authorities must respond within six months of submission. If no formal answer is received within six months, the transaction is deemed valid, and the favourable tax regime can no longer be challenged.

Stakebuilding before making an offer is customary in specific situations, particularly when aligned with strategic goals that are well documented and communicated to regulatory bodies, if necessary. It is advisable for companies to seek legal advice to navigate through the complexities of Market Abuse Regulation (MAR) and ensure their stakebuilding strategies comply with all the relevant legal and regulatory standards.

Reporting Obligations

Notification of threshold crossing

Reporting obligations may be triggered as a result of stakebuilding. In France, individuals or entities acting independently or in concert must disclose their holdings in any company listed on the regulated market of Euronext Paris: (i) to the company; and (ii) to the AMF, within four trading days of crossing certain thresholds of share capital or voting rights. These thresholds are set at 5%, 10%, 15%, 20%, 25%, 30%, one third, 50%, two thirds, 90% and 95%. The disclosure must include details such as the number of shares and voting rights held. The AMF will subsequently make this information public.

To determine whether a threshold has been crossed, specific rules for calculation and aggregation apply. These include:

• adding shares and voting rights held by entities acting in concert or controlled by the disclosing party;
• including shares and voting rights that the disclosing party or its concert parties may acquire at their discretion through financial instruments or agreements;

• taking into account the underlying instruments or agreements of shares and voting rights that provide economic exposure similar to direct shareholding, whether settled physically or in cash; and

• taking into account shares and voting rights held by any party with whom the disclosing entity has entered into a temporary sale agreement.

Failure to comply with these disclosure requirements will result in the automatic suspension of voting rights for shares exceeding the relevant threshold until proper disclosures are made. In addition, voting rights may remain suspended for two years following compliance with this disclosure requirement. Other penalties may be imposed based on the specific circumstances of non-compliance.

Notification of intent

In addition to the notification of threshold crossing, when an investor or group of investors crosses the 10%, 15%, 20% and/or 25% threshold(s) upwards in the share capital or voting rights of any company listed on the regulated market of Euronext Paris, a notification of intent for the following six months must be filed with the AMF and the company within five trading days.

Such notification must include:

• whether the investor is acting alone or in concert;
• the methods of financing the acquisition;
• whether the investor intends to continue buying shares and to acquire control of the issuer;
• whether the investor intends to request the appointment of one or several members of the board of directors, the management board or the supervisory board;
• the strategy the investor intends to pursue in relation to the issuer;
• any agreements on a securities financing transaction involving the shares or voting rights of the issuer; and
• the investor’s intentions regarding the settlement of any financial futures that it holds on the issuer’s shares.

If the investor’s intention changes within six months of the notification of intent, an updated notification must be filed.

These requirements aim to maintain market integrity and investor confidence.

AMF’s General Regulation

Regulations related to a notification of intent are supplemented by the AMF’s General Regulation, under which any person preparing a financial transaction that is likely to have a significant impact on the price of a financial instrument must disclose the characteristics of this transaction to the public as soon as possible. If confidentiality is temporarily necessary for the transaction to be carried out and if such person is able to maintain this confidentiality, such person may bear responsibility for deferring such disclosure.

In addition, in case of leakage, an anti-rumour mechanism (known as “put up or shut up”) is provided for in the AMF’s General Regulation. Particularly when the shares of an issuer are subject to significant price fluctuations or unusual volumes, this mechanism allows the AMF to request that where there is reasonable ground to believe that a person is preparing a tender offer, this person should declare its intent within a period of time set by the AMF. If the person questioned states that it does not intend to make a tender offer for the shares of the potential target, it may not make a tender offer for the company concerned before the expiry of a six-month period from the date of such statement, unless there is a significant change in the environment, situation or shareholding structure of the target or the potential bidder. If the person questioned acknowledges its intent to make a tender offer, it must disclose the details of such tender offer in a press release within a period of time set by the AMF, failing which, the person will be deemed not to have the intent to make a tender offer.

In France, when a target company is listed on the regulated market of Euronext Paris, a mandatory offer for the balance of the target’s shares and other equity securities that grant access to its share capital is triggered under two primary circumstances:

• when the bidder, acting alone or in concert, directly or indirectly crosses the threshold of 30% of the target’s shares or voting rights; and
• when a bidder who already holds between 30% and 50% of the shares or voting rights, increases such holding by more than 1% within a period of less than 12 consecutive months.

For calculating these thresholds, the same rules as those used for legal reporting obligations apply (see 6.1 Stakebuilding).

The AMF can grant exemptions to this mandatory tender offer requirement in specific situations. Exemptions may be granted in cases where the threshold crossing results from capital increases aimed at rescuing a financially distressed company, or from corporate restructuring transactions like mergers, demergers, or contributions in kind, provided these transactions are approved by the target’s shareholders.

In France, the typical transaction structure for the acquisition of a public company is the acquisition of a controlling stake through a block trade, in which case, a mandatory tender offer has to be filed with the AMF (under the “simplified” procedure if the stake represents more than 50% of the share capital and voting rights, which means in particular that the offer period will last for ten trading days only).

As an alternative, the acquisition of a public company may simply occur through the filing of a voluntary tender offer under the “normal” procedure, which means that the offer period will last for 25 trading days. In such a case, it is recommended that the bidder should obtain irrevocable undertakings to tender from major shareholders of the target.

The acquisition of a public company may also take place by way of a merger or a contribution in kind. However, such transaction structure is not widely used in France since:

• under French law, mergers are subject to an extended timeline and a strict legal process, involving the appointment of appraiser(s) in charge of drafting a report on the proposed terms of the transaction, the approval of the transaction by a two-thirds majority of the shareholders of both companies (or of the company issuing shares in consideration in the case of a contribution in kind), the drafting of an information document to be reviewed by the AMF as the case may be, etc; and

• as a result of a merger or a contribution in kind, the shareholders of the acquiring company are automatically diluted.

In addition, one of the main objectives of the acquiror of a public company is generally to implement a squeeze-out procedure to force the minority shareholders of the public company to sell their target shares (such squeeze-out procedure being applicable if the target shares held by minority shareholders do not represent more than 10% of the share capital and voting rights of the target). However, such squeeze-out procedure is not automatically applicable in case of implementation of a merger or a contribution in kind (ie, a tender offer will have to be launched afterwards in order for the new majority shareholder to implement such squeeze-out procedure).

In France, cash is predominantly used as consideration in acquisitions, whether public or private and in the technology sector or other sectors, although share contributions to listed or unlisted entities may also occur.

Public acquisitions tend to take the form of a cash acquisition (takeover bid), but the share exchange route (exchange tender offer) is also sometimes used. The offers can also be mixed (cash and share exchange within the same offer) or alternative (cash or share exchange).

A cash alternative must be proposed if the shares offered in the framework of an exchange tender offer are not liquid shares listed on an EU regulated market, or if the bidder, alone or in concert, has purchased more than 5% of the target’s shares or voting rights in cash within the last 12 months. In addition, in the event of a squeeze-out following an exchange tender offer, French regulation requires the bidder to offer a cash alternative to the minority shareholders.

All shareholders must receive the same offer terms, and tender offer pricing rules must be followed. Specifically, in mandatory tender offers, the price must be at least equal to the highest price paid by the bidder or its concert parties for shares of the issuer in the preceding 12 months. Moreover, an independent expert must confirm the fairness of the tender offer consideration for the transaction to proceed.

It should be noted that under French law, the completion of an acquisition through a merger or a share contribution may not trigger cash payment (subject to the exception of very small amounts, or soulte, to be paid for technical reasons).

In cases where the value is uncertain, parties sometimes use earn-out arrangements to address differences in perceived value. These arrangements involve additional payments contingent on achieving specific performance targets, such as revenue, EBITDA, or regulatory approvals. Earn-out mechanisms can be part of an agreement or embedded in financial instruments like share warrants, preferred shares, or contingent value rights. While applicable to both public and private M&A transactions, they are generally more challenging to implement in public M&A deals.

In France, takeover bids for companies listed on the stock exchange must generally be unconditional, but some specific exceptions are outlined in the AMF’s General Regulation:

• Minimum acceptance threshold – bidders may require a minimum percentage of shares to be accepted by shareholders (refer to 6.7 Minimum Acceptance Conditions for more information).
• Additional conditions – voluntary offers can also be subject to:
1. reaching a voluntary minimum acceptance threshold which in practice cannot be higher than two thirds of the share capital or voting rights;
2. approval from the bidder’s shareholders for issuing new securities as part of the offer consideration;
3. the success of other simultaneous offers by the same bidder;
4. antitrust approvals obtained in the initial review phase – if a detailed investigation follows, the offer will automatically be withdrawn; and
5. regulatory approvals, whether industry-specific (such as for financial institutions) or related to foreign investment regulations (such approval being a condition to the opening of the offer period, see 6.14 Timing of the Takeover Offer).
• Offer withdrawal – the bidder may withdraw the offer if the AMF announces a timeline for a rival or improved bid, or with the AMF’s consent if defensive measures by the target are enacted, for example:
1. the issuance of golden shares;
2. the entry into shareholders’ agreements granting pre-emption rights, tag-along rights, or voting commitments, making hostile takeovers more difficult;
3. the solicitation of counter-offers from more favourable bidders, often leading to a bidding war that maximises value for the shareholders;
4. the restructuring of assets to alter the target’s profile and to reduce its attractiveness to the hostile bidder; or
5. the completion of capital increases.

Under French law, the works council of a French target must be consulted in the case of a change of control prior to any final decision being taken by the seller and prior to the execution of any binding agreement relating to such transaction.

As a result, in transactions involving the information and consultation of the works council of the target company, the parties usually agree to issue an official press release under which they inform the market that a binding offer to purchase the shares of the French issuer has been made by the bidder and that the works council of the French issuer will be consulted in connection with this offer. In practice, such disclosure occurs upon execution of either: (i) a put option granted by the bidder to the seller(s), in the case where the contemplated transaction implies the prior acquisition of a controlling stake through a block trade; or (ii) a tender offer agreement between the target company and the bidder. Where applicable, earlier disclosure may be required if there is a leak or abnormal market activity, in which case a press release must be issued without delay.

Such documentation usually contains standard representations and warranties and undertakings so that the target company will:

• consult its works council;
• co-operate with the independent expert to be appointed in order to allow it to establish the expert’s report containing the fairness opinion in the framework of the offer;
• conduct its business in accordance with the ordinary course;
• not solicit counter-offers; and
• file the relevant offer documentation with the AMF once the draft tender offer is filed by the bidder.

The contractual documentation will be made fully available to the AMF and, as the case may be, to the independent expert who will refer to it in its fairness opinion.

Under French law, any takeover bid, whether voluntary or mandatory, will automatically lapse if the bidder does not achieve ownership of more than 50% of the target’s share capital or voting rights. However, the AMF can allow this threshold to be lowered or waived if reaching it is impractical due to factors unrelated to the offer’s terms, such as existing control by another shareholder or counter-offers.

The 50% threshold aligns with the majority needed for decisions at ordinary general meetings, which handle key matters such as appointing directors and approving financial statements. This ensures that the bidder pays an appropriate control premium, as de facto control requires more than mere minority influence.

For voluntary offers, bidders can set higher thresholds, such as two thirds of voting rights, which grants control over extraordinary general meetings and enables actions such as amending the articles of association or approving mergers. Conversely, setting a threshold at 90%, necessary for a squeeze-out and tax consolidation, is not accepted by the AMF.

In France, squeeze-out mechanisms enable a bidder to acquire 100% of a target company’s shares after a tender offer, provided it holds more than 90% of the share capital and voting rights. There is no guaranteed method to achieve this threshold.

The AMF clearance is not required if the squeeze-out price equals the tender offer price and either: (i) the offer followed the standard procedure by a bidder with less than 50% ownership; or (ii) a multi-criteria valuation and fairness opinion from an independent expert was provided during the tender offer. This valuation considers assets, profits, subsidiaries, business prospects, and the market price of the shares of the target.

In other cases, AMF approval is needed to implement a squeeze-out procedure, requiring: (i) a multi-criteria valuation; (ii) a fairness opinion from an independent expert; and (iii) a review of specific documentation.

Securities granting access to share capital can also be squeezed out if the bidder holds 90% on a diluted basis. No similar procedure exists for non-listed companies.

Under French law, any tender offer must be fully funded at the time the offer is filed with the AMF. The bidder is required to provide a bank guarantee or proof of available funds, ensuring it has the financial capacity to complete the transaction. As a consequence, no tender offer that is subject to obtaining the necessary financing may be filed with the AMF.

The role of the presenting bank is to guarantee the performance by the bidder of its obligations in connection with the tender offer (in particular its undertaking to acquire all the target shares tendered to the offer at the offer price). In order to be in a position to give such confirmation to the AMF in the filing letter, the presenting bank requires the bidder (or its financing bank, as the case may be) to provide cash collateral for the corresponding amount on the trading day preceding the filing of the offer. 

This rule protects target shareholders from speculative bids and reinforces the credibility of the offer.

In France, bidders frequently employ various security measures to safeguard their position and mitigate the risk of transaction failure, especially in competitive M&A environments. The following mechanisms are designed to balance deterrence and fairness, protecting bidders’ interests in complex transactions.

Break-Up Fees

These are commonly agreed upon, requiring the target to pay a fee if the transaction fails due to specific conditions, such as accepting a rival bid. In public M&A transactions, break-up fees are subject to regulatory scrutiny to ensure they do not obstruct the free flow of offers, as noted by the Paris Court of Appeal in the Capgemini/Altran case (13 March 2020), and do not exceed 2% of the deal value.

Match Rights

These provisions allow the original bidder to match any superior counter-offer, providing a strategic advantage. This was notably used in a recent bidding war for a French renewable energy company, allowing the initial bidder to maintain its position.

Non-Solicitation Provisions

Targets often commit not to seek alternative bids after signing exclusivity agreements, focusing efforts on finalising the negotiated deal.

When a bidder acquires a significant but non-controlling stake in a French company, it often negotiates additional governance rights to protect its investment and influence strategic decisions. These rights are particularly important in deals where the bidder aims for strong oversight without full ownership.

• Board representation: A common request is the appointment of one or more directors proportionate to the bidder’s shareholding.
• Veto rights: Bidders may seek veto power over key decisions like major acquisitions, capital increases, or significant budget changes, ensuring they have a say on critical matters.
• Information rights: Enhanced access to financial reports and strategic plans allows the bidder to monitor performance closely and anticipate risks.
• Shareholder agreements: These often formalise governance rights, covering voting commitments, pre-emption rights, and rules for future share transfers.

In the French M&A market, bidders often seek commitments from key shareholders to increase the likelihood of a successful tender offer. These commitments, which must be disclosed to the target, the AMF and the public, typically involve shareholders agreeing to tender their shares.

However, the AMF and French case law emphasise that irrevocable commitments should not undermine the principle of free competition between offers. As such, these commitments usually include provisions allowing shareholders to withdraw if a superior offer arises, ensuring a balance between deal security and shareholder interests.

Negotiations for these commitments generally occur early in the process, providing the bidder with assurance and demonstrating strong support for the transaction.

These practices aim to enhance deal certainty while respecting regulatory principles and protecting shareholder rights.

After the filing of a draft offer with the AMF, it reviews the draft offer documentation (composed of the draft offer document of the bidder, the draft response offer document of the target, as well as their respective technical documents containing certain legal, financial and accounting information on the bidder and on the target) in order to issue a clearance decision before the offer period can be officially opened.

Once the AMF has received the two draft offer documents, it takes in theory between five and ten trading days to obtain clearance of the offer from the AMF, subject to any counter-offers being filed or complex issues arising. In practice, it takes at least one month.

The AMF will check that the proposed offer price complies with applicable minimum pricing rules, it being remembered that under French law: (i) no such minimum pricing rules apply to voluntary tender offers; and (ii) for mandatory tender offers, the proposed offer price must be at least equal to the highest price paid by the bidder or its concert parties for shares of the issuer in the preceding 12 months (see 6.4 Consideration and Minimum Price).

Upon clearance of the offer by the AMF, the AMF immediately sets the offer timetable, including the opening date of the offer, the offer period (the duration of which will depend on the structure of the offer, see 6.3 Transaction Structures) and the closing date.

Under the “normal” procedure, such timeline may be extended when filing a counter-offer (which can be filed with the AMF until the fifth trading day preceding the end of the offer period), in which case the AMF may adjust the timeline to allow a fair comparison between the offers and to extend the offer period pertaining to the initial offer, so that shareholders may take appropriate decisions.

In the case of a bidder making an offer on a public company involved in what qualifies as a regulated activity under French law, the opening of the offer period may only take place after the required approval has been granted by the relevant administrative body.

In the case of a bidder making an offer on a public company where the contemplated acquisition triggers an antitrust clearance requirement by the French antitrust authority or the competent authority in this respect in another state that is party to the EEA agreement or in the United States, the bidder may specify that the closing of the offer will occur subject to obtaining the relevant antitrust clearance. The offer will lapse if the proposed transaction is or becomes subject to the “Phase II” procedure provided for under French law or European law, or a similar procedure provided for by the competent authority of a foreign country. Such provisions will also apply in the case of a draft offer that is subject to notification to a foreign competent authority other than those mentioned above, if the procedure followed for the purpose of obtaining such authorisation is subject to a deadline occurring within ten weeks from the opening of the offer period, unless the AMF agrees to extend the offer timetable.

In practice, bidders tend to obtain any regulatory approvals after the announcement of an offer, but prior to the opening of the offer period.

The technology sector does not, as such, require any form of operating authorisation from public authorities.

However, certain very specific sectors require prior authorisation in order to carry out certain activities. For example, in the arms sector, the manufacture, trade and brokering of military equipment are subject to authorisation by the Ministry of Defence. In addition, administrative authorisations are very common in the energy sector. Finally, in the banking and financial sector, certain specific activities (such as intermediation in banking transactions) require the company to meet certain conditions in order to be authorised to carry out such activities on a regular basis.

It is therefore important, before setting up a business, to seek information and advice to ensure that the proposed activity does not require specific authorisations or permits.

The primary securities market regulator for M&A transactions in France is the Financial Markets Authority (Autorité des marchés financiers or AMF).

Foreign investments in France in sectors considered “sensitive” by the French government are subject to prior authorisation by the minister of economy.

The prior authorisation mechanism applies to foreign investors (including from the European Union), acquiring: (i) control of a French company; or (ii) all or part of a French branch of activity; or (iii) if the investor is not an EU/EEA national, 25% or more of the voting rights (or 10% or more if the company is listed).

As per the updated 2025 guidelines issued by the minister of economy, all or part of a French branch of activity also covers the acquisition, directly or indirectly, by a foreign investor of: a portfolio of sensitive contracts, a significant number of intellectual property rights necessary for the operation of the branch of activity in question, or an exclusive or non-exclusive patent or licence for a patent. Tech deals may fall under this type of acquisition.

The sectors considered sensitive include:

• defence and similar activities;
• critical infrastructure, goods and services; and
• research and development in critical technologies (eg, cybersecurity, AI, robotics, quantum technologies or semiconductors).

Authorisation requests are filed by the investor before the Office for the Control of Foreign Investments in France (which is part of the Ministry of Economy). The Office for the Control of Foreign Investments may then either authorise (with or without conditions) or refuse the investment.

If a transaction is carried out without prior authorisation, the transaction may be cancelled and subject to a penalty. In addition, the Ministry of Economy may notably:

• suspend the voting rights attached to the investment;
• prohibit the distribution of dividends;
• suspend the sale of any assets; or
• appoint an agent responsible for protecting national interests within the company.

French law does not provide for a national security review of transactions other than the foreign investment screening regulations considered under 7.3 Restrictions on Foreign Investments.

In France, transactions must be notified to the French Competition Authority (Autorité de la concurrence) when the companies’ combined turnover exceeds EUR150 million worldwide, and EUR50 million in France for at least two parties. It should be noted that thresholds are lower in retail.

The procedure has two phases:

• Phase 1 assesses whether the transaction raises competition concerns. If not, it is cleared.

• Phase 2 allows a deeper investigation, if concerns exist. The French Competition Authority can approve the transaction, block it, or require remedies such as divestitures or behavioural commitments.

At the EU level, transactions are controlled by the European Commission when they have an EU dimension: combined global turnover above EUR5 billion and EU turnover above EUR250 million for at least two parties (unless most of the turnover is in one member state). The process also has two phases: a short review and an in-depth review. The EC may authorise, prohibit, or condition its approval.

The completion of a transaction before clearance (“gun jumping”) is strictly prohibited and can result in heavy fines.

The Works Council Procedure

French companies employing at least 11 employees must establish a works council (Comité social et économique or CSE). The information and consultation of the works council of companies having more than 50 employees is required for projects regarding the economic and legal organisation of the company (which includes the acquisition of shares of the company).

The procedure requires the filing of a memorandum, clearly and precisely explaining the proposed transaction and its legal and economic impact on employment. The works council must then issue an opinion, positive or negative, with or without the assistance of an expert. However, this opinion is not binding, as the works council does not have the right of veto.

Penalties for non-compliance

However, it is essential that the works council consultation procedure be completed before any binding commitment to execute the transaction is agreed. Signing any commitment prior to obtaining an opinion constitutes a criminal offence of obstructing the actions of employee representatives and is heavily penalised.

Accordingly, standard corporate practice involves executing either a put-option agreement (where only the seller is required to complete the works council procedure) or a memorandum of understanding (where both parties must complete the works council procedure). Once the works council’s opinion has been obtained, the parties can proceed to sign the share purchase agreement.

In France, prudential control applies to transactions involving regulated financial institutions such as banks, insurers and investment firms.

The Prudential Supervision and Resolution Authority (Autorité de contrôle prudentiel et de résolution or ACPR) must authorise any acquisition reaching 10%, 20%, 30% or 50% of capital or voting rights.

The process begins with a formal notification by the acquiring party, followed by an assessment period of up to 60 working days during which the Prudential Supervision and Resolution Authority may request additional information. The authority evaluates the financial strength, governance and reliability of the buyer and ensures that the merged entity will remain solvent and well managed.

The Prudential Supervision and Resolution Authority may approve, conditionally approve, or reject the transaction based on prudential criteria.

The Towercast ruling (Case C-449/21, 16 March 2023) from the European Court of Justice represents the most significant recent legal development for French technology M&A. The ruling established that transactions falling below mandatory notification thresholds can still face ex-post review for abuse of dominant position if they strengthen a dominant firm’s market position.

This particularly impacts tech acquisitions of small start-ups or “predatory” transactions previously considered safe from scrutiny. In June 2024, for example, the Paris Court of Appeal ordered the French Competition Authority to re-examine TDF’s 2016 below-threshold acquisition of Itas for potential abuse of dominant position.

The key implications are that acquirers in the tech sector must now assess dominance risks even for sub-threshold deals. In this regard, due diligence should evaluate competitive effects beyond mere notification requirements, as parties face potential regulatory challenges in the years post-closing, fundamentally altering risk assessment for technology M&A transactions.

In recent years, issues relating to data protection, intellectual property and regulatory compliance have become increasingly important in due diligence.

These issues are particularly important in the technology sector, where it is not uncommon for customer or user personal data to be handled, or where intellectual property rights (software, code, trade marks, etc) constitute a large part of a company’s value. Thus, if the company does not comply with the GDPR or does not own the intellectual property necessary for its business, it exposes itself to significant risks that few buyers are willing to take on.

The issue of compliance is also becoming increasingly important, particularly since the introduction in 2016 of the obligation for certain companies to implement an internal compliance plan.

In public M&A deals, most information is already available through mandatory disclosures (financial reports, regulated announcements). However, in friendly transactions, additional information may be shared by the target company with all bidders in a data room, subject to AMF guidance.

Data room access must be limited to serious bidders under confidentiality agreements, the information shared must be strictly necessary, and any inside information must be restored in all material respects to the market via the offer documentation, ensuring equal treatment of competing bidders.

In France, data privacy regulations impose some constraints on due diligence for technology companies. Applicable law establishes stringent requirements governing the collection, processing and disclosure of personal data throughout transactional processes.

Parties must ensure that personal data accessed during due diligence – including employee records, customer information, and user data – is subject to the principles of data minimisation, anonymisation or pseudonymisation wherever practicable. Cross-border transfers of personal data outside the EU necessitate appropriate safeguards. Special categories of personal data, including health, biometric and financial information, require enhanced protection measures. Unauthorised disclosure of such data may constitute breaches of both confidentiality obligations and data protection legislation, potentially exposing parties to regulatory enforcement action and civil liability.

To ensure compliance, sellers typically establish virtual data rooms containing redacted or aggregated information that limits the exposure of identifiable personal data. In certain circumstances, particularly where sensitive datasets are material to the transaction, full data access may be deferred until post-completion, subject to appropriate contractual protections and employee consultation requirements.

In France, takeover bids are regulated by the AMF to ensure transparency. A bid is publicly announced when the bidder decides to proceed, if market rumours arise, or when certain ownership thresholds trigger a mandatory offer.

The bidder must file a draft offer document with the AMF, which includes details on the offer’s terms, intentions and financing. This document is reviewed by the AMF and published on the bidder’s website, along with a press release summarising the main terms.

In voluntary offers, publication occurs at the bidder’s discretion, while mandatory offers quickly follow the triggering event. Key offer characteristics are often disclosed ahead of AMF filing to maintain market transparency.

In the case of a takeover with exchange of shares in whole or part, a prospectus or an “exemption document” is required. This document informs investors about the bidder’s and target’s prospects, the rights associated with the securities, and the transaction’s impact, as per Commission Delegated Regulation No 2021/528. A prospectus or exemption document is also necessary for mergers or contributions in kind that result in new share listings.

In the case of a takeover with exchange of shares in whole or part, the buyer’s shares to be remitted in the exchange to the target company’s shareholders also need to be shares listed on a regulated market, or shares to be listed on a regulated market (eg, as a result of the buyer being merged into a company with shares listed on a regulated market).

A cash alternative must also be proposed if the shares offered in the framework of a takeover with exchange of shares in whole or part are not liquid shares listed on an EU regulated market, or if the buyer, alone or in concert, has purchased more than 5% of the target’s shares or voting rights in cash within the last 12 months. In addition, in the event of a squeeze-out following a takeover with exchange of shares, French regulation requires the bidder to offer a cash alternative to the minority shareholders.

In the case of a takeover bid, aside from the draft offer document of the bidder and the draft response offer document of the target company, the bidder and the target company have to prepare and file their respective technical documents (containing certain legal, financial and accounting information on the bidder and on the target) with the AMF before the offer period can be officially opened (namely, the “other information” documents).

The “other information” document prepared by the bidder and filed with the AMF will include at least a summary presentation of its last statutory financial statements and, where applicable, its last consolidated financial statements or, if such information has already been made public, a cross-reference to these financial statements together with an update on the most significant information on the bidder published by the bidder during the ongoing financial year. The “other information” document prepared by the target company and filed with the AMF will contain a cross-reference to its last statutory financial statements and, where applicable, its last consolidated financial statements, and an update on the most significant information on the target company published by the target company during the ongoing financial year.

In addition, pro forma financial statements must be included in a prospectus or exemption document if the transaction alters any key business size indicators of the issuer by over 25%. Companies listed on a regulated market are required to prepare their consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), as mandated by EU regulations. For non-listed companies, French GAAP or national accounting standards apply, although IFRS may be used voluntarily in some cases, particularly in cross-border transactions or when preparing pro forma financial information for a prospectus.

For listed companies, the AMF requires a draft offer document with key transaction details, but only significant information from contractual documents is publicly disclosed.

The contractual documentation will be made fully available to the AMF and, as the case may be, to the independent expert who will refer to it in its fairness opinion.

In France, directors’ principal duties in business combinations include acting in good faith to promote the company’s success for the benefit of shareholders. Directors must act in accordance with the corporate interest and with loyalty throughout M&A transactions. They are required to comply with legal pre-contractual information obligations and maintain discretion during negotiations.

Directors owe duties primarily to the company itself, not directly to all stakeholders. However, the board must consider social and environmental impacts when determining strategy, and employee representatives must be informed and consulted before finalising binding agreements in companies with over 50 employees. Directors can be held liable – both civilly and criminally – to the company or third parties for breaching applicable laws or constitutional documents, or for mismanagement.

In France, private M&A transactions do not imply the establishment of special or ad hoc committees in the context of business combinations.

However, the situation is different in the context of public M&A transactions. In the case of a public offer likely to cause conflicts of interest within the board of directors, or to jeopardise equal treatment between the target company’s shareholders, or to involve a squeeze-out procedure, the board of directors of the target company has to establish an ad hoc committee.

Ad hoc committees are in charge of making recommendations on the appointment of an independent expert, monitoring the independent expert’s work, and preparing a draft reasoned opinion on behalf of the board of directors on the proposed offer.

Such ad hoc committees must comprise a majority of independent directors.

In a public M&A context, the board of directors of the target company is not involved in the negotiations.

In such a case, the board of directors of the target company must only issue a reasoned opinion on the tender offer, providing shareholders with an informed assessment of its terms, fairness, and potential consequences. Since the Florange Law of 2014 and the transfer of responsibility for implementing defence measures to the members of the board, the directors can have their own opinion on the admissibility of the offer in the interests of the stakeholders involved. This means that the directors can “just say no” and implement defensive measures which will repel the bidder, as long as the defensive measures comply with the company’s interest and do not undermine the competence of the shareholders’ meeting.

Litigation in M&A transactions in France remains relatively uncommon, but it does occur in certain circumstances, particularly in contentious takeovers or when disputes arise over deal execution. French corporate law’s emphasis on shareholder protection, combined with the AMF’s regulatory oversight, generally help to prevent major conflicts – but when they do arise, they tend to involve specific legal and financial issues.

In France, shareholder activists occasionally attempt to interfere with the completion of announced M&A transactions, though such interference remains relatively rare compared to markets like the US.

When shareholder activists do get involved, this typically takes the form of public campaigns or legal actions aimed at influencing deal terms or blocking transactions perceived as undervaluing the target company.

Activists may challenge the fairness of the offer price, argue against strategic misalignment, or push for alternative bids. They can also urge boards to renegotiate terms or to improve governance commitments post transaction. In some high-profile cases, institutional investors have sided with activists to require better financial or ESG considerations before supporting a deal.

In France, it is common practice for a board of directors to seek external legal, financial and strategic advice in the context of a takeover or a business combination in order to guide the board with respect to feasibility/strategic implications and the organisation of the contemplated transaction in a structured form.

Any such external advice will be additional to the advice of the independent expert who may be appointed by the board of directors to draft a report containing the independent expert’s fairness opinion in the framework of the tender offer (see 6.4 Consideration and Minimum Price, 6.6 Deal Documentation and 11.2 Special or Ad Hoc Committees).

In specific situations, such as mergers or contributions in kind, French law requires the appointment of independent auditors who will be in charge of issuing reports on the value of the assets or shares involved.

This reliance on independent legal, financial and strategic advice helps to mitigate litigation risks and supports the board in demonstrating that it has acted diligently and in the best interests of the company and its shareholders.