In 2024, the French M&A market faced a more challenging environment despite global growth.

While worldwide deal value rose by 13% to USD3.6 trillion (Bain & Company’s Global M&A Report 2025), France saw a 10% decline compared to 2023, with total deal value amounting to USD52 billion. Deals over USD30 million fell by 3% in volume, largely due to the reduced presence of foreign – particularly Anglo-Saxon – investors. Domestic players took the lead, representing more than half of major transactions.

Sector performance varied significantly. Media M&A activity surged by 884%, driven by four key deals – three of which were divestitures – including the sale of Altice Media (BFMTV and RMC) to CMA CGM for EUR1.55 billion, the acquisition of Paris Match by Bernard Arnault for EUR120 million, and the transfer of Xavier Niel’s shares in Le Monde to a non-profit foundation aimed at protecting editorial independence. Financial services also showed strong growth, with a 158% rise in M&A volumes, while healthcare deals dropped by 43%, reflecting more cautious investor sentiment.

This evolving landscape highlights the mixed attractiveness of the French market. Political instability following the dissolution of the National Assembly in June 2024 has fuelled investor caution and weakened France’s standing as a top European investment hub. Outbound acquisitions by French buyers also fell by 10% in value.

However, the resilience of France’s innovation-driven sectors remains notable. In June 2024, Mistral AI, a French start-up specialising in generative artificial intelligence, raised EUR600 million, reaching a EUR5.8 billion valuation. The pharmaceutical industry also demonstrated strong appeal, as seen in AstraZeneca’s nearly EUR1 billion acquisition of French biotech Amolyt Pharma.

At the same time, high-profile divestitures reflected ongoing strategic shifts. In October 2024, Sanofi sold 50% of its subsidiary Opella – producer of widely-used medications like Doliprane – to US private equity fund Clayton, Dubilier & Rice (CD&R), sparking national debates over pharmaceutical sovereignty and employment impacts.

These contrasting trends underscore a complex dynamic: while sectors like AI and biotech continue to attract substantial investment, broader political and economic uncertainties cast a shadow over the market’s attractiveness. Experts expect an upturn in M&A activity in France during the second half of 2025.

Longer and More Complex M&A Processes in a Cautious Market

Over the past 12 months, the French M&A market has been marked by a more cautious and risk-sensitive approach from buyers (as this was already the case in 2023). This caution stems from a combination of rising financing costs, persistent inflation and geopolitical instability, leading to longer and more complex deal processes and permitting to acquirers to have greater leverage in negotiating the terms of the contractual documentation.

Key trends shaping this environment include (i) more buyer-friendly due diligence processes (which may result in longer transaction timelines), (ii) inclusion of price structure mechanism (eg, earn-outs, deferred payments provisions, etc, linking parts of the purchase price to future performance of the target) and (iii) stronger legal protections mechanism (extended catalogue of representations and warranties with an increased tendency to rely on warranty and indemnity (W&I) insurance policies, inclusion of material adverse change (MAC) provisions and conditions precedent) in the contractual documentation.

Divestments and Strategic Refocusing

In response to economic pressures, many French corporates have focused on core businesses and high-growth activities, leading to a wave of divestments and restructuring. Prominent examples include the following.

Sanofi’s sale of 50% of Opella

In October 2024, Sanofi divested half of its consumer healthcare subsidiary Opella to US private equity fund Clayton, Dubilier & Rice (CD&R), marking a strategic move to streamline its operations and focus on high-margin pharmaceuticals.

Media sector divestitures

The media industry saw a surge in M&A activity, with a remarkable 884% increase in deal volume. Key transactions included the EUR1.55 billion sale of Altice Media (BFMTV and RMC) to CMA CGM and the acquisition of Paris Match by Bernard Arnault for EUR120 million.

Increased Regulatory Scrutiny and French Foreign Investment Control (FIC)

Regulatory oversight has intensified, adding complexity and longer timelines to French M&A transactions.

Stricter FIC screening

In line with previous years, the French Ministry of Economy and Finance continued to reinforce its foreign investment control screening mechanism in 2024 by extending the list of sensitive sectors that are subject to a screening (ie, extension to the acquisition of control of a French branch (succursales), activities relating to the extraction, processing and recycling of critical raw materials) and enacting the permanent reduction of the investment threshold in a listed company for a non-EU investor from 25% to 10% of voting rights. In 2024, out of 309 files filed with the French Ministry of Economy and Finance, 135 have been subject to an authorisation (among which 60 were authorised subject to compliance by the investor with certain undertakings).

Impact of the EU Foreign Subsidies Regulation (FSR)

Since its entry into force in mid-2023, the FSR has introduced new filing requirements and potential remedies for large transactions involving non-EU financial support.

Distressed M&A Activities

The French M&A market has been marked by major distressed M&A activities such as the following.

Orpea’s recapitalisation

The takeover of the troubled French nursing home group Orpea by Caisse des Dépôts et Consignations highlights the active role of public institutions in stabilising strategically important but financially weakened companies.

Casino’s restructuring

The acquisition of control of French retail group Casino by a consortium led by Daniel Kretinsky exemplifies the growing trend of distressed acquisitions in response to financial pressures and sectoral consolidation.

These trends reflect a complex and evolving M&A landscape in France, where economic caution, regulatory tightening and strategic realignments are shaping deal activity and market dynamics.

In 2024, M&A activity in France was notably driven by sectors such as tech and AI, media, pharmaceuticals and financial services.

The tech sector, especially artificial intelligence, led the way with high-profile deals like Mistral AI’s EUR600 million fundraising, reflecting strong investor enthusiasm for innovative, high-growth companies.

Media saw an 884% increase in deal volume.

Pharmaceutical and biotech remained active with strategic acquisitions, including AstraZeneca’s nearly EUR1 billion purchase of Amolyt Pharma and Sanofi’s partial divestiture of its subsidiary Opella.

In contrast, healthcare M&A declined by 43%, reflecting regulatory uncertainty and cost pressures.

These trends illustrate a dual dynamic: strong investment in innovation-driven sectors alongside caution in more traditional industries.

In France, share sales remain the most common method for acquiring a company in private M&A transactions due to their simplicity and limited operational disruption. Asset sales are less frequent, typically used in smaller transactions, given their higher tax burden and more complex implementation.

In France, M&A activity is overseen by several key regulatory authorities, depending on the nature of the transaction.

• Autorité des marchés financiers (AMF) – regulates public M&A transactions involving listed companies. It ensures market transparency, protects investors, and supervises takeover bids, disclosures and squeeze-out procedures.
• Autorité de la concurrence (French Competition Authority – FCA) – regulates M&A transactions (exceeding certain thresholds) in order to prevent anti-competitive practices and ensure compliance with EU and French antitrust rules (see 2.4 Antitrust Regulations).
• French Ministry of Economy and Finance – is responsible for screening foreign direct investments (FIC) in strategic sectors that could affect the national interests of France under the French FIC regime (see 2.3 Restrictions on Foreign Investments).
• European Commission – for cross-border deals that meet certain revenue thresholds, merger control can fall under the jurisdiction of the European Commission, which evaluates the deal’s impact on competition within the EU single market.
• Sector-specific regulators – Certain industries – like banking, insurance, and telecommunications – require approval from specialised regulatory bodies, such as the Autorité de contrôle prudentiel et de résolution (ACPR) for financial institutions and the Autorité de Régulation des Communications Electroniques, des Postes et de la distribution de la Presse (ARCEP) with respect to telecommunication industry.

France has established a robust foreign investment control (FIC) regime designed to protect national interests and security in sectors considered as being sensitive.

This FIC regime applies to foreign investors, including non-EU and non-EEA investors, as well as EU/EEA investors, envisaging acquiring the control of a French target operating sensitive activities.

The scope of sensitive sectors has expanded in recent years and now notably covers defence, energy, telecommunications, public health, media, transport, food security, water supply and gambling activities. It also includes R&D activities in critical technologies like artificial intelligence, cybersecurity, biotechnology and semiconductors.

French Ministry of Economy and Finance has wide discretion in the assessment of the material scope of application of the FIC regulations and it currently tends to control transactions that may previously have been considered out of the scope of its control.

The French FIC regime requires prior authorisation from the French Ministry of Economy and Finance with respect to the following types of investments in sensitive sectors:

• acquisition of direct or indirect control of the French entity;
• acquisition of a branch of activity of a French entity; and
• crossing certain thresholds of voting rights in a French entity by non-EU investors (ie, 25% for private companies and 10% for listed companies).

The French Ministry of Economy and Finance reviews prior authorisation requests in a two-step process:

• Phase 1 – 30 business days, leading either to a decision that the notified transaction does not fall within the scope of the authorisation, an authorisation, or a notification that the investment requires further review and the opening of a Phase 2; and
• Phase 2 – 45 business days from receipt of the “Phase 1-Notice”, leading to an authorisation (which may be subject to conditions) or a refusal.

In case the French Ministry of Economy and Finance makes the approval of an investment subject to conditions, this leads to issuance by the French Ministry of Economy and Finance of a draft undertaking letter. Investor’s undertakings may notably include (i) maintaining the activity of the target in France, (ii) continuing executing ongoing contracts on substantially the same terms, and (iii) information and reporting obligations towards the French Ministry of Economy and Finance.

In France, the merger control regulation is enforced by the French Competition Authority (FCA) (Autorité de la Concurrence) and the European Commission (EC), depending on the size and geographic scope of the contemplated transaction.

A transaction is subject to the prior approval of the FCA in case the following thresholds are cumulatively exceeded:

• combined worldwide turnover of all concerned undertakings exceed EUR150 million;
• French turnover of each of at least two concerned undertakings exceed EUR50 million; and
• the transaction does not exceed the EC’s thresholds.

Lower thresholds (of EUR75 million and EUR15 million) apply to transactions in the retail sector and in the French overseas departments or territories.

The merger control clearance process generally starts with an informal pre-notification phase during which the acquirer starts preliminary discussions with the FCA. Such phase may last between a few weeks to several months depending on the complexity of the filing.

Following the pre-filing phase, the FCA reviews the file in a two-step process:

• Phase 1 – having a maximum duration of 25 business days (assuming that the file is complete) during which the FCA assesses the file and decides whether to clear the transaction swiftly or initiate further investigation and the opening of a Phase 2; and
• Phase 2 – having a maximum duration of 65 business days (assuming that the file is complete) during which the FCA conducts an in-depth analysis to assess the transaction’s impact on competition, considering factors like market shares, barriers to entry, and possible remedies or commitments.

Upon expiration of Phase 2, the transaction may then either be approved, approved subject to conditions, or prohibited (if it risks harming competition or creating a dominant position) by the FCA.

It should be noted that for transactions that do not present a signing risk to competition, a simplified procedure having a duration of 15 business days as of the end of the pre-notification phase may be implemented.

In 2024, the French Competition Authority continued its strict enforcement against gun-jumping practices (premature implementation of transactions before regulatory clearance), following major fines in recent years.

One of the main employment aspects to be taken into consideration in French M&A transactions is the role of the works council (comité social et économique – CSE), which is granted information and consultation rights.

A works council with broadened competencies shall be established in French companies having more than 50 employees and shall notably be consulted in the case of a change of control of an entity prior to any final decision being taken by the seller (ie, prior to the execution of any binding agreement relating to such operation).

The works council must render its opinion within a one-month period. Such period may be extended to two months if the works council decides to appoint an expert auditor (which will assist the works council with respect to the assessment of the projects and documents provided by the company) or to three months if there are several local works councils consulted with several experts appointed.

The works council is not granted a veto right, and the contemplated M&A transaction can occur even if the works council has given a negative opinion. Before entering into a binding agreement, the seller is, however, requested to take into account the works council’s comments or observations.

In the case of a direct sale of a majority of the shares or of the business as a going concern (fonds de commerce) of a French company below certain thresholds (small or mid-sized French company), the management of such entity will also have to comply with the so-called “Hamon law”, which consists in individually informing each employee of the company about the contemplated sale and of their right to make an offer.

When the company has a works council with broadened competencies that must be informed and consulted with respect to the contemplated sale, the Hamon law notification process will be carried out in parallel to the works council process and will be deemed to be completed once the works council has rendered its opinion. In such case, the Hamon law process will thus have no additional impact on the timing.

This Hamon law obligation also applies when no works council with broadened competencies has been established within the French entity. In such a case, the informing of the employees must be carried out at least two months prior to the execution of any binding agreement. Indeed, employees have a two-month period (as from receipt of the notification) to submit an offer to purchase the share or business to be sold.

Such period of two months may expire earlier if each employee of the French company expressly waives their right to purchase the shares or the business as a going concern.

The notification process will be handled by the seller. When notifying the contemplated sale to the employees, the seller does not need to disclose the identity of the potential bidder. The employees are subject to an obligation of discretion concerning the information provided under the Hamon law.

There is no obligation to react to the employees’ offer in any specific manner, and such right should not be seen as an employee pre-emption or priority right.

See 2.3 Restrictions on Foreign Investments.

From 2020, an increasing number of bidders filed two subsequent tender offers on the same issuer, the first tender offer being filed at a much lower price than the second one, then violating the principle of equal treatment of shareholders, which is one of the general principles governing tender offers.

With increasing criticism of this practice, particularly from minority shareholders, the AMF decided to grant statements of compliance (avis de conformité) on tender offers conditional upon obtaining the bidder’s undertaking not to file a new offer within a certain period of time, in case the bidder did not contemplate proceeding with the squeeze-out of the shares should the tender offer be successful. On the contrary, in cases where the bidder contemplates proceeding with the squeeze-out of shares should the tender offer be successful, the AMF did not grant statements of compliance (avis de conformité) on tender offers conditional upon obtaining the bidder’s the undertaking not to file a new tender offer within a certain period of time.

This requirement from the AMF peaked in the case of the tender offer filed on the French company Société Marseillaise du Tunnel Prado Carénage (SMTPC), where the AMF granted a statement of compliance dated 13 April 2022, subject to the undertaking from the bidder (i) not to file a new tender offer on this issuer within a first period of 12 months and (ii) not to file a tender offer at a higher price than the first tender offer within a period of 24 months following the expiry of the first period of 12 months.

In the past 12 months, no changes directly impacting takeover law have been made in France, nor are any such changes planned. Nevertheless, two major reforms have recently taken place to enhance the attractiveness of financial markets, one at the French level (the “Attractiveness law”, or Loi Attractivité), and the other at the European level (the “Listing Act”).

The main changes are as follows.

• Introduction of multiple voting rights: Companies listed on the regulated market of Euronext Paris or on a multilateral trading facility market (eg, Euronext Growth Paris) may now issue shares with multiple voting rights in the framework of their first listing. Such shares may be issued for a duration of ten years (renewable once for a duration of five years) and may give access to a maximum of 25 voting rights per share (this limitation being only applicable to issuers listed on a multilateral trading facility market).
• Simplification of share capital increase procedures: The framework for share capital increases without preferential subscription rights has been made more flexible:
1. the limitation on the number of shares which may be issued by way of a public offering reserved to a restricted circle of investors (so-called “private placement”) has been increased from 20% to 30% of the share capital per year; and
2. the limitation on the number of shares which may be issued in consideration for contributions in kind on the regulated market of Euronext Paris has been increased from 10% to 20% of the share capital per year.
• Revisions to AMF Regulations: The requirement for a mandatory retail offering tranche in IPOs has been removed from the AMF General Regulation, making the listing process more appealing to a broader range of issuers, including private equity funds seeking exit strategies.
• More flexible prospectus rules: The Listing Act significantly relaxed prospectus requirements since 4 December 2024, notably by:
1. raising the threshold triggering a prospectus requirement from 20% to 30% of the securities already admitted to trading per year, such threshold being applicable in case of admission to trading and in case of public offering, whether on the regulated market of Euronext Paris or on a multilateral trading facility market (eg, Euronext Growth Paris);
2. introducing new exemptions based on listing duration of existing securities, allowing issuers to publish a simplified 11-page information document instead of a full prospectus in several cases; and
3. introducing new simplified prospectuses structures (“EU follow-on prospectus” and “EU Growth issuance document”). In addition, from 5 June 2026, the threshold triggering a prospectus requirement in case of public offering(s) will be increased from EUR8 million to EUR12 million per year.

Together, these changes reflect France’s ongoing commitment to aligning its regulatory environment with international standards while enhancing market efficiency and protecting investor interests.

Stakebuilding before launching an offer may be permissible 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 MAR's complexities and ensure their stakebuilding strategies comply with all relevant legal and regulatory standards.

Notification of Threshold Crossing (déclaration de franchissement de seuil)

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 upon 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 subsequently makes this information public.

Aggregation rules

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 shares and voting rights underlying instruments or agreements 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 a temporary sale agreement.

Sanctions

Failure to comply with these disclosure requirements results in the automatic suspension of voting rights for shares exceeding the relevant threshold until proper disclosures are made. Additionally, 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 (déclaration d’intention)

In addition to the notification of threshold crossing, when an investor or group of investors crosses, in an upward direction, the 10%, 15%, 20% and/or 25% threshold(s) 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 as per Article L. 233-7 of the French Commercial Code.

Such notification must include information about:

• 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 the 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 financial futures that it may hold, on the issuer's shares.

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

These requirements aim at maintaining market integrity and investor confidence.

In France, listed companies often use the option to impose additional disclosure obligations in their articles of association. These additional thresholds for reporting share capital or voting rights can be set as low as 0.5%. The articles of association typically specify that the same calculation rules apply as those used for statutory reporting thresholds, in accordance with Article L.233-7 of the French Commercial Code.

Moreover, listed companies may limit the total number of voting rights that a shareholder can exercise at general meetings, which serves as a deterrent to stakebuilding. Although this option is less commonly employed, it can effectively limit the influence of large shareholders, as allowed under Article L.225-125 of the French Commercial Code.

Stakebuilding efforts may also face challenges due to specific sector regulations or foreign investment laws. These regulations, such as those outlined in the French Monetary and Financial Code (Code monétaire et financier), can require prior authorisation for acquiring stakes as low as 10% of the share capital, in sectors deemed sensitive or strategic. See 2.3 Restrictions on Foreign Investments.

French legislation permits the use of derivatives, provided they adhere to the Market Abuse Regulation (MAR).

Certain derivatives require disclosure when they allow the holder to either acquire target shares or voting rights at their discretion or gain an economic exposure equivalent to share ownership. This includes instruments like contracts for difference, share swaps and those tied to a basket or index of shares. Notably, these economically-exposed derivatives are excluded from calculations for mandatory tender offer thresholds.

These requirements are designed to maintain transparency and regulatory compliance in derivatives transactions related to corporate activities.

In France, derivatives are subject to specific filing and reporting obligations under securities and competition laws. These regulations aim to maintain market integrity and prevent anti-competitive behaviour.

Securities Disclosure

• Threshold reporting – derivatives that enable share acquisition or provide economic exposure must be disclosed when crossing certain thresholds (see 4.2 Material Shareholding Disclosure Threshold and 4.4 Dealings in Derivatives).
• Intent declaration – certain threshold crossings require a notification of intent, in line with AMF guidelines and MAR.

EMIR Compliance

Derivatives transactions must adhere to the European Market Infrastructure Regulation (EMIR), which requires reporting, clearing and risk mitigation to ensure market transparency and reduce systemic risk.

Competition Law

Merger control – acquiring control via derivatives may trigger notifications under Articles L.430-1 to L.430-10 of the French Commercial Code and the EU Merger Regulation.

In France, shareholders crossing thresholds of 10%, 15%, 20%, or 25% in a company’s share capital or voting rights must disclose their intentions to the company and the AMF. See 4.2 Material Shareholding Disclosure Threshold and the discussion on the material shareholding disclosure threshold (notification of intent).

In France, disclosure obligations differ depending on whether the target is a listed or non-listed company.

For listed companies, the disclosure requirement is governed by the EU Market Abuse Regulation (MAR) (Regulation (EU) No 596/2014) and the AMF General Regulation. Any inside information – meaning specific, non-public information likely to significantly impact the price of the company’s securities – must be disclosed to the public as soon as possible (Article 17 MAR). However, disclosure can be delayed if an immediate disclosure to the market would prejudice the issuer’s legitimate interests, if confidentiality is effectively maintained and if such delay is not likely to mislead the public.

In practice, disclosure is often made upon signing of a binding agreement, such as a share purchase agreement (SPA) or a tender offer agreement. 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.

From a practical standpoint, parties usually issue a press release when appropriate documentation is signed. In transactions involving the information and consultation of the works council of the target company, the parties usually also agree to issue an official press release upon execution of a put option granted by the bidder under which they inform the market that a binding offer to purchase the shares of the French entity has been granted by the bidder and that the works council of the French entity is currently being consulted about this offer.

In France, market practice on the timing of disclosure generally aligns with the legal requirements set out under the EU Market Abuse Regulation (MAR) and the AMF General Regulation. As a general rule, disclosure of inside information must be made as soon as possible, unless a delay is justified and confidentiality can be preserved (Article 17 MAR).

However, certain aspects remain open to interpretation, particularly regarding:

• whether ongoing negotiations qualify as inside information. Case law has established that this applies when the deal is sufficiently advanced with a reasonable chance of success;
• the extent to which the proposed transaction may impact the price of the shares; and
• whether delaying disclosure could harm the issuer's interests or mislead the public, requiring immediate press release.

In practice, issuers tend to disclose transactions at the moment a binding agreement is signed, such as a share purchase agreement (SPA) or a tender offer agreement, provided that no leakage or abnormal market behaviour has occurred beforehand.

Appropriate confidentiality safeguards, such as non-disclosure agreements, are put in place to ensure that discussions remain private until the deal reaches a formal stage. If a leak occurs or unusual trading activity is detected, a public disclosure must be made immediately, in line with AMF guidance.

In negotiated business combinations in France, due diligence is a key step that allows the buyer to assess whether to proceed with the transaction and under what terms. Under French law, sellers are required to disclose any information that is decisive for the buyer’s consent and not otherwise known or accessible.

In private deals, due diligence is particularly extensive due to the limited availability of public information. Buyers typically review legal, financial, tax, HR, commercial and operational matters, including corporate records, financial statements, key contracts, real estate, IP rights and employment issues.

Clean rooms containing commercially sensitive information relating to the target may also be established, to which only a limited number of identified persons (usually lawyers) will have access.

There is growing emphasis on ESG matters, in light of France’s CSR obligations and upcoming EU regulations. Cybersecurity and data protection have also become critical areas of focus, particularly in transactions involving tech and digital businesses, due to GDPR requirements.

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 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, exclusivity clauses are commonly used in M&A transactions, especially in private deals. In a bilateral sale process, buyers typically request a limited exclusivity period to secure their position while conducting due diligence and negotiating final terms. In a competitive bidding process, exclusivity is usually granted at a later stage once a preferred bidder has been identified.

Exclusivity is viewed as a way to reduce deal uncertainty and accelerate negotiations. While primarily benefiting acquirers, it may also serve sellers by creating momentum and preserving confidentiality.

Standstill agreements are less frequent but may be used, particularly in public M&A or where sensitive information is disclosed. They restrict buyers from acquiring shares or launching a competing offer during negotiations, helping prevent hostile tactics and maintain a balanced negotiation environment.

These mechanisms have become increasingly important in today’s competitive and risk-sensitive deal landscape.

In France, it is common practice to formalise the terms and conditions of a tender offer through a dedicated agreement, especially in friendly or recommended transactions.

Such agreements are typically entered into between the bidder and the target company, and may also involve key shareholders. They serve to structure the transaction and provide legal certainty on the offer mechanics, while remaining compliant with the principle of fair competition between offers and counter offers, as required by the AMF.

These agreements do not prevent rival bids but help set a clear framework for the offer, particularly regarding pricing terms, regulatory conditions and procedural commitments.

The timeline for acquiring or selling a business in France varies depending on the deal’s complexity, regulatory requirements and labour law constraints. Most transactions are completed within two to nine months, covering key stages such as due diligence, negotiation of contractual documents, consultation of the works council (CSE), and fulfilment of antitrust or foreign investment approvals where applicable.

Labour law obligations, including CSE consultation and employee information procedures under the Loi Hamon, can add several weeks to the timeline (see 2.5 Labour Law Regulations).

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, as outlined in Article L.433-3 of the French Monetary and Financial Code:

• 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 the bidder, already holding 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. However, shares underlying cash-settled derivative instruments or agreements with an economic effect similar to share ownership are not included in this calculation. See 4.2 Material Shareholding Disclosure Threshold (assimilation rules) and 4.4 Dealing in Derivatives.

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 operations like mergers, demergers or contributions in kind, provided these operations are approved by the target’s shareholders.

In France, cash is predominantly used as consideration in acquisitions, whether public or private, although share contributions to listed or unlisted entities are also common.

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

It should be noted that 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 accordance with Article 231-8 of the AMF General Regulation. 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, as per Article 231-9 of the AMF General Regulation. Moreover, an independent expert must confirm the fairness of the tender offer consideration for the transaction to proceed.

In cases where valuation is uncertain, parties often employ 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 there are specific exceptions outlined in the AMF General Regulation.

• Minimum acceptance threshold: Bidders may require a minimum percentage of shares to be accepted by shareholders (refer to 6.5 Minimum Acceptance Conditions for more information).
• Additional conditions: Voluntary offers can also be subject to:
1. reaching a voluntary minimum acceptance threshold (seuil de renonciation) 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, as per Article 231-12 of the AMF General Regulation;
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, in accordance with Article 234-6 of the AMF General Regulation; and
5. regulatory approvals, whether industry-specific (such as for financial institutions) or related to foreign investment regulations.
• Offer withdrawal: The bidder may withdraw the offer if the AMF announces a timeline for a rival or improved bid, or with AMF’s consent if defensive measures by the target are enacted (refer to 9.3 Common Defensive Measures for typical defensive tactics).

In private M&A transactions, parties have considerable freedom to agree on conditions, as long as they are not unlawful, unethical or reliant solely on one party’s discretion.

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, as per Article 231-9 of the AMF General Regulation. 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 competing bids.

The 50% threshold aligns with the majority needed for decisions at ordinary general meetings, which handle key matters like 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 like 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.

Under French law, any tender offer (offre publique) 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. This rule protects target shareholders from speculative bids and reinforces the credibility of the offer.

In private M&A transactions, financing conditions are more flexible. It is not uncommon for bidders to negotiate conditions precedent linked to securing financing. However, in competitive sale processes, sellers often push for binding offers without financing conditions to minimise deal execution risk.

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.

• 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 2024, break-up fees typically ranged from 1% to 3% of the deal value. 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 competing 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.

These mechanisms are designed to balance deterrence and fairness, protecting bidders’ interests in complex transactions.

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 in 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 France, shareholders are allowed to vote by proxy in both private and public companies, a practice that is well-established and widely used, especially for large corporations with dispersed shareholder bases. This mechanism enables shareholders who cannot attend general meetings to participate in the decision-making process, ensuring their interests are represented.

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, in accordance with Article L.433-4 of the French Monetary and Financial Code. 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 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) 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.

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.

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 a tender offer, both the bidder and the target company must prepare specific documents for review by the AMF. The bidder submits a draft offer document (projet de note d’information), while the target provides a draft offer document in response (projet de note en réponse). These drafts are reviewed and potentially amended before the AMF approves them alongside the offer’s terms. Then, final versions of the offer document and of the offer document in response are sent to the AMF before their actual disclosure by the AMF, the bidder and the target.

The offer document provides shareholders with essential information to decide whether to tender their shares. It includes details about the bidder and its partners, the offer’s terms, strategic intentions for the next year, potential synergies, and financial aspects, such as transaction costs and financing. It also outlines any plans for mergers, squeeze-outs or delistings.

The target’s response document presents the board’s opinion on the offer’s impact, a fairness opinion from an independent expert, the board members’ intentions regarding their shares, and feedback from the works council, as the case may be.

In case of a takeover with exchange of shares in all 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 (fusion-absorption) or contributions in kind (apports en nature) that result in new share listings.

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 (Plan Comptable Général) applies, 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.

Private M&A deals generally do not require public disclosure unless regulatory needs arise.

In accordance with French law requirements, the legal representatives have a duty to act in the corporate interest (intérêt social) of the company.

This involves taking into account the interests of the shareholders as well as of other stakeholders (eg, the employees, ESG considerations, etc).

In case of non-compliance with this requirement, the legal representatives may engage (depending on the nature of the fault) their civil and criminal liability.

In a public M&A context, the board of directors of the target company must issue a reasoned opinion (avis motivé) on the tender offer, providing shareholders with an informed assessment of its terms, fairness and potential consequences.

In the context of a business combination, the legal representative shall act as a prudent businessperson would, ensuring that the envisaged transaction is carried out in the interest of the company from a legal, financial and strategic standpoint.

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

The situation is different in the context of public M&A transactions. In case of a tender offer likely to cause conflicts of interest within the board of directors, jeopardise the equal treatment between the target company’s shareholders or 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 the independent expert, monitoring the independent expert’s works, and preparing a draft reasoned opinion (avis motivé) of the board of directors on the proposed offer.

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

In France, there is no formal equivalent to the US business judgement rule.

However, French courts generally adopt a deferential approach to decisions made by a company’s board of directors in the context of a business combination, provided that directors have acted in good faith, on an informed basis, in accordance with their legal duties and in the corporate interest of the company.

French law imposes fiduciary obligations on directors, including duties of loyalty, care and diligence. Courts do not typically review the merits of the business decision itself, but rather assess whether directors have respected their procedural and legal obligations. This approach is increasingly aligned with the spirit of the business judgement rule, recognising the discretionary nature of strategic decisions, particularly in M&A transactions.

This principle was implicitly reaffirmed in recent case law and doctrinal commentary, which confirm that courts refrain from substituting their judgement for that of the board, unless there is clear evidence of breach of duty or misuse of power. However, in cases of conflict of interest, failure to disclose key information, or abuse of majority power, courts may exercise stricter scrutiny.

In France, it is common practice for a board of directors to seek independent external legal, financial and strategic advice in the context of M&A transactions in order to guide the board with respect to feasibility/strategic implications and the structure of the contemplated transaction.

In specific situations, such as mergers or contributions in kind, French law requires the appointment of independent auditors (commissaires aux apports or commissaires à la fusion) 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 mitigate litigation risks and supports the board in demonstrating that it has acted diligently and in the best interest of the company and its shareholders.

In accordance with French law requirements, the execution of related-party agreements (conventions réglementées) (eg, any agreement entered into between the company and its direct or indirect shareholder holding more than 10% of the voting rights, or any director of such company) other than those which are customary and entered into on an arm’s length basis, are subject to a specific approval regime from the shareholders.

The aim of this process is to ensure that the agreement serves the company’s interests without influence from interested parties.

In France, conflicts of interest in public M&A transactions and related-party deals are closely scrutinised. The corporate governance codes recommend directors in conflict situations to disclose such conflict and to abstain from related discussions, with deviations requiring justification.

Hostile tender offers are permitted in France but remain relatively uncommon compared to other jurisdictions like the United States.

The AMF oversees tender offers on listed companies. A hostile offer occurs when a bidder files an offer which is not recommended by the target’s board of directors. The AMF provides strict rules on disclosure, fairness and equal treatment of shareholders, ensuring that hostile tender offers adhere to the same transparency standards as friendly ones.

The regulatory environment, corporate governance culture and protective legal measures (see 9.2 Directors’ Use of Defensive Measures and 9.3 Common Defensive Measures) contribute to the relative low number of hostile tender offers, though there have been notable exceptions.

In France, directors have the ability to deploy defensive measures against hostile takeovers, subject to strict regulatory oversight and shareholder rights.

Under the French Commercial Code and AMF regulations, directors must act in the company’s and its shareholders’ best interests. Defensive measures must align with this principle and cannot be purely obstructionist. Companies are increasingly considering ESG commitments and long-term strategy disclosures as soft defences to align stakeholders against hostile approaches.

In this context, the directors’ role remains a delicate balance between protecting the company’s strategic vision and ensuring shareholders’ rights to evaluate offers on their merits.

In France, defensive measures against hostile takeovers must strike a balance between protecting the company’s long-term strategy and preserving shareholder rights.

Several measures are commonly used to deter unsolicited bids.

• Multiple voting rights: Encouraged by the Florange Law and the PACTE Law, multiple voting rights may apply to shares held for more than two years in the registered form (forme nominative). This mechanism strengthens the influence of long-term shareholders and makes it harder for hostile bidders to gain control.
• Voting and ownership caps: Some companies include statutory limitations on voting rights or share ownership, capping the percentage of votes or shares a single investor can hold, regardless of their economic stake.
• Golden shares: Companies listed on the regulated market of Euronext Paris can issue golden shares with enhanced voting rights for long-term shareholders, reinforcing stability and discouraging opportunistic takeovers.
• Shareholders’ agreements: Long-term investors often enter into agreements granting them pre-emption rights, tag-along rights or voting commitments, making hostile takeovers more difficult.
• Seeking white knights: The board can solicit competing offers from more favourable bidders, often leading to a bidding war that maximises value for the shareholders.
• Asset restructuring: In some cases, the company may consider divestitures or strategic acquisitions to alter its profile and reduce its attractiveness to the hostile bidder. However, such measures must be justified by business rationale rather than purely defensive motives.
• “Pac-Man” defence: The board of directors can propose to initiate a tender offer on the initial bidder.
• Capital increases: Subject to the appropriate delegation(s) being granted by the shareholders, the board can propose issuing new shares, and/or share subscription warrants which may be exercised at a discounted price (bons Breton) for companies listed on the French regulated market, to dilute the hostile bidder’s stake and make the transaction more expensive. This approach requires careful alignment with minority shareholder interests.

The AMF closely monitors defensive measures to ensure they comply with principles of fairness, transparency and shareholder protection.

These defensive strategies, while effective, require careful implementation to balance the interests of the board, management and shareholders.

It has to be noted that since the Florange Law of 2014, the neutrality principle (principe de neutralité) of the board of directors once an offer has been made public has been reversed, so that, except if the by-laws state otherwise, the board of directors of any company listed on the regulated market is allowed to take any measure in order to cause the offer to fail.

Despite the reversal of the neutrality principle (principe de neutralité) brought by the Florange Law in 2014, the board’s freedom to implement defence measures during a tender offer is limited.

Company’s Interest

French law requires that any defensive measures taken by the board must align with the company’s corporate interest, balancing the preservation of its strategic vision and shareholder value. Directors cannot adopt measures solely aimed at entrenching their own positions or blocking a takeover without valid business justification. Directors are liable if they take certain measures that are contrary to the company’s corporate interest, or even if they remain inactive insofar as it is their duty rather than their ability to defend the company’s interests.

Principles of French Takeover Law

The Veolia–Suez case (2020–2021) was an opportunity for the AMF to point out that directors implementing defensive measures during an offer must also respect the free interplay between offers and counter-offers (libre jeu des offres et de leurs surenchères), the equal treatment of shareholders, market integrity and fairness in transactions.

Ultimately, French law seeks to balance board autonomy with shareholder protection, ensuring that defensive measures serve the company’s long-term interests rather than short-term managerial self-preservation.

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 measure respects the company’s interest and does not undermine the competence of the shareholders’ meeting.

Litigation in M&A transactions may occur at several stages of the deal (see 10.2 Stage of Deal) but remains relatively uncommon in France.

French corporate law’s emphasis on shareholder protection, combined with the AMF’s regulatory oversight, generally help prevent major conflicts.

In 2024, there was a noticeable uptick in disputes related to ESG due diligence and regulatory compliance. Buyers are increasingly scrutinising environmental and social practices, leading to claims of misrepresentation when sustainability metrics or governance practices fail to align with disclosed information. The events of early 2025 are likely to call ESG issues into question, however, as the Senate is considering a bill to remove social and environmental reporting constraints from the CRSD to encourage corporate competitiveness.

The AMF plays a preventive role by ensuring transparency and fairness in public offers. It frequently intervenes when there are allegations of misleading disclosures, breaches of fiduciary duties, or violations of market rules. Courts, meanwhile, enforce contractual obligations and adjudicate disputes over shareholder rights, price adjustments and post-closing obligations.

In private M&A deals, arbitration clauses and mediation mechanisms are increasingly favoured due to their confidentiality and efficiency. The ICC International Court of Arbitration, based in Paris, is often chosen for cross-border transactions.

In France, litigation can arise at various stages of an M&A transaction, but it typically occurs either pre-closing or post-closing, depending on the nature of the dispute. Each phase presents distinct legal challenges and potential conflicts, and the stage of the deal often influences how courts or arbitral tribunals address the issues.

Pre-Closing Litigation

• Breach of exclusivity or confidentiality: Disputes may arise when one party engages with third parties in violation of exclusivity agreements or misuses confidential information obtained during due diligence.
• Failure to meet conditions precedent: Buyers or sellers may dispute the satisfaction of closing conditions, such as regulatory approvals, third-party consents or financing commitments, leading to termination threats or demands for specific performance.
• Material adverse change (MAC) clauses: In the current economic climate, with interest rate fluctuations and market volatility in 2024, MAC-related disputes have become more common. Buyers sometimes seek to withdraw from deals by invoking unforeseen adverse developments impacting the target’s business.

Post-Closing Litigation

• Breach of representations and warranties: Once the deal closes, undisclosed liabilities, regulatory non-compliance or misrepresentation of financial health often lead to claims for damages or indemnification.
• Price adjustment and earn-out disputes: Contingent pricing mechanisms often lead to disagreements over financial performance metrics and earn-out calculations, particularly in volatile sectors like technology and biopharma.

The stage of the deal heavily influences legal strategy, with pre-closing cases often seeking specific performance and post-closing cases typically pursuing damages or price adjustments.

In urgent situations, French courts may grant interim relief measures (such as injunctions) to prevent irreparable harm, like blocking the execution of disputed clauses or suspending the deal’s closing until the underlying issue is resolved.

In 2024 (as for previous years) the inclusion of MAC provisions in contractual documentation was often part of the negotiating points between the parties, particularly in light of ongoing economic uncertainty and market volatility.

Courts have been called upon to determine whether changing market conditions or deteriorating financial performance of the target constitute valid grounds for deal termination. For example, recent high-profile disputes in the tech and energy sectors have illustrated how differing interpretations of MAC clauses can lead to protracted legal battles.

Another common source of litigation involves disagreements over post-closing price adjustments or earn-out provisions. With rising interest rates and inflation impacting business valuations, buyers and sellers have become more cautious, leading to more detailed and heavily negotiated adjustment mechanisms in the transactional documentation.

Shareholder activism has become an increasingly prominent force in the French M&A landscape over the last few years, driven by a combination of evolving corporate governance standards and a push for greater shareholder value.

Activist investors, including hedge funds and institutional shareholders, have grown more assertive in influencing strategic decisions, particularly in sectors like energy, financial services and consumer goods. In recent years, they have also pushed for greater accountability on environmental matters, advocating for “Say on Climate” votes to influence corporate climate strategies and disclosures.

For example, shareholder activism had a huge impact on the restructuring of Atos, a French IT services company facing severe financial difficulties. As part of this plan, Atos announced a significant reduction in its debt while forcing existing shareholders to either invest additional capital or face massive dilution of their holdings. In response, a group of Atos shareholders formed an association that initiated legal proceedings against Atos, arguing that the company’s financial restructuring unfairly disadvantaged minority shareholders. The legal strategy aimed at holding Atos accountable for decisions that allegedly misled investors and caused significant financial harm and the association sought compensation for shareholders who had seen their investments eroded by the company’s mismanagement. Activists are no longer merely pressuring boards through voting campaigns; they are increasingly turning to legal action to protect investor rights.

Activist campaigns are often supported by proxy advisory firms, whose influence on institutional investors plays a crucial role in contested shareholder votes. As a result, companies are increasingly engaging in proactive dialogue with their shareholders to anticipate and mitigate activist demands.

In France, shareholder activists often aim at driving significant strategic and financial changes within target companies.

Their objectives typically include encouraging companies to enter into M&A transactions, spin-offs or major divestitures to unlock shareholder value. Activists frequently push for the sale of underperforming assets, restructuring efforts or mergers they believe will generate higher returns.

Beyond transactional aims, activists also advocate for changes in capital allocation policies, such as increasing dividends, share buybacks, or optimising debt structures. In some cases, they call for board reshuffles or changes in executive leadership to improve corporate governance and operational efficiency.

A recent example from 2024 is the case of Vivendi, one of France’s largest media conglomerates. Under pressure from investors, Vivendi announced a plan to spin off into four separately listed companies negatively affecting its stock valuation. This move was aligned with activist strategies, as breaking up large, diversified businesses often unlocks greater shareholder value by allowing individual units to be valued independently by the market.

This type of restructuring follows a broader global trend where activists urge conglomerates to spin off divisions that they believe would be more valuable as independent companies.

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 it does happen, it 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 improve governance commitments post-transaction. In some high-profile cases, institutional investors have sided with activists to demand better financial or ESG considerations before supporting a deal.