1) Is a merger control regulation in force?

Yes. The French merger control regulation was first introduced in 1977 as a voluntary regime, and by a law of 15 May 2001 as a mandatory regime.

2) Which authorities enforce the merger control regulation?

The French Competition Authority (“FCA”) enforces the merger control regime.

The Minister of the Economy also has certain powers in relation to merger control (see topics 43 and 45).

Decisions of the FCA or the Minister of the Economy, as the case may be, may be appealed before the French Administrative Supreme Court (Council of State).

3) Relevant regulations and guidelines with links:

The merger regulation is contained in articles L.430-1 et seq. (legislative part) and articles R. 430-2 et seq.  (executive part) of the French Commercial Code. More detailed rules may be found in various executive orders and soft law instruments. Links to the relevant legislation, guidelines and forms are listed here:

4) Does general competition regulation apply to mergers or ancillary restrictions?

French competition law is interpreted in accordance with EU competition law in this respect, in particular the EU Merger Regulation n°139/2004 of 20 January 2004 (the “EUMR”).

The Parties to a merger do not have to inform the FCA of restrictions of competition that are ancillary to the merger.  However, they may do so, in particular when the compatibility of the ancillary restraint with competition law raises doubts.

Where ancillary restraints are brought to the attention of the FCA, it will be assessed whether they are directly related and necessary to the implementation of the transaction. If not, such restrictions may be caught by the general prohibition on anti-competitive agreements.

Furthermore, where the transaction does not meet the thresholds for merger filing, a dominant undertaking might be held to abuse its dominance by acquiring a competitor, or several companies might be considered as entering into anticompetitive practices.

5) May an authority order a split-up of a business irrespective of a merger?

The FCA has the power to impose structural remedies, such as the split-up of a business, in connection with an abuse of dominance case or an abuse of economic dependence case, regardless whether the transaction has been notified under merger control rules.

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

Banking and insurance sectors

For mergers subject to an in-depth review (Phase II) of the FCA and involving financial businesses such as banks, insurance companies, credit institutions and investment service companies, the FCA shall seek the opinion of the French Prudential Supervision and Resolution Authority (art. L.612-22 of the French Monetary and Financial Code). However, the final decision vests in the FCA.

In addition, certain direct or indirect acquisitions of equity in credit institutions, loan companies, investment service companies and insurance companies require approval from the French Prudential Supervision and Resolution Authority (art. L.511-12-1 I and L. 531-6 I of the French Monetary and Financial Code; art. L. 322-4 of the French Insurance Code).

Press sector

In the press sector, Article 7 of Law N°86-897 of 1 August 1986 prohibits, subject to international agreements between France and a foreign country, foreigners from acquiring more than 20% of the share capital or voting rights of a company publishing in French.

In addition, Article 11 of Law N°86-897 of 1 August 1986 prohibits acquisitions of control (within the meaning of article L. 233-3 of the French commercial code) by any entity or natural person of political and general daily newspapers representing more than 30% of the national daily printed newspapers of the same nature.

Audiovisual sector

For mergers subject to an in-depth review (Phase II) of the FCA and involving a radio or television services editor or distributor, the FCA shall seek the opinion of the Audiovisual and Digital Communications Authority (art. 41-4 of Law N°86-1067 of 30 September 1986). However, the final decision vests in the FCA.

In addition, any direct or indirect change in the control (within the meaning of article L. 233-3 of the French commercial code) of a company holding radio or television broadcasting rights requires the approval of the Audiovisual and Digital Communications Authority (art. 42-3 of Law N°86-1067 of 30 September 1986).

Foreign investment control

Pursuant to articles L. 151-3 et seq. of the French Monetary and Financial Code, foreign direct investments are subject to the review of the French Minister of the Economy when the following conditions are met:

1. A foreign investor is involved: any natural person of foreign nationality, any natural person not domiciled in France for tax purposes, any legal entity existing under the laws of a foreign country, any legal entity controlled by any of those;
2. A particular transaction is carried out:
   • any acquisition of control, within the meaning of article L. 233-3 of the French commercial code, of a French entity or establishment registered in the Trade and Commercial Register,
   • any partial or total acquisition of a French entity’s business,
   • any direct or indirect acquisition of more than 25% of the voting rights of a French entity by an investor from a third country outside the EU or the EEA,
   • any direct or indirect acquisition of more than 10% of the voting rights of a French listed entity by an investor from a third country outside the EU or the EEA;
3. The target performs certain activities: activities which interfere with public order, public security, defence, energy, transport, public health, food safety, new technologies and media.

Any transaction meeting the above conditions must be notified to the Minister of Economy, who has 30 days to carry out a (Phase I) preliminary review and issue either a decision stating that a prior authorisation under the FDI rules is not required, a decision to enter into a (Phase II) in-depth review of the transaction, or an unconditional clearance of the transaction.

At the end of the Phase II review, the Minister issues a decision stating that the transaction is cleared, is cleared subject to conditions, or is prohibited.

7) Are any parts of the territory exempted or covered by particular regulation?

Yes. Mergers involving parties active in certain French overseas departments and territories are subject to separate merger control thresholds (see topic 15). 

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory, provided the thresholds are met.

9) Is there a general definition of transactions subject to merger control?

Yes, pursuant to the French merger control regime (art. L. 430-1 of the French commercial code), a merger subject to merger control is defined as a transaction whereby:

1. two or more previously independent undertakings amalgamate into one undertaking;
2. one or more persons who already control at least one undertaking, or one or more undertakings – by an agreement to purchase shares or assets or by any other means – acquire direct or indirect control of the entirety of or parts of one or more other undertakings; or
3. a joint venture that will perform on a lasting basis all the functions of an autonomous economic entity is established.

Note that certain transactions of a temporary nature are not considered to be mergers subject to merger control (see topics 19 and 20).

10) Is "change of control" of a business required?

Yes, a merger is considered to take place only if the transaction results in a change of control over a business.

However, transactions which result in the establishment of a new business (a joint venture) controlled by two or more businesses or persons may also, if certain conditions are met, constitute a merger.

11) How is “control” defined?

Pursuant to the French merger control regime (art. L. 430-1 of the French commercial code), “Control” of an undertaking is obtained through rights, agreements or by any other means which, either separately or in combination, make it possible to exert a decisive influence on the operations of the undertaking, in particular:

1. ownership rights or rights of use over all or part of an undertaking’s assets,
2. rights or agreements which give the possibility to exert decisive influence on the composition, voting or decisions of the management of an undertaking.

Control may be sole, i.e. exercised by one undertaking acting alone, or joint, i.e. exercised by two or more independent undertakings. Joint control is deemed to arise where each of the controlling undertakings are able to block the strategic decisions of the controlled undertaking and the shareholders are therefore called upon to collaborate and agree on the strategy of the controlled undertaking.

The entry of a new shareholder in the capital of an undertaking previously subject to sole or joint control constitutes a merger by way of an acquisition of joint control if, subsequent to that transaction, the new shareholder, alongside the former shareholder(s), has the power to block the strategic decisions of the undertaking.

However, where two or more undertakings acquire a target undertaking with a view to allocating the assets between them on a lasting basis upon completion of the transaction, the transaction does not constitute an acquisition of joint control.  In this case, it is an acquisition of sole control by each of the controlling undertakings over the assets which it acquires. From the point of view of French merger control, these are two separate transactions.

"Control" and "Change of control" are interpreted according to EU competition law, including the EUMR and the EU Commission’s Consolidated Jurisdictional Notice.

12) Acquisition of a minority interest

The acquisition of a minority interest which does not result in a change of control over a business is not subject to French merger control.

However, if the acquisition of a minority interest confers the buyer with de facto control of a business, the transaction will be subject to merger control. This is, for instance, the case if the buyer is provided with veto rights regarding decisions which go beyond what is normally granted to minority shareholders to protect their financial interests and are essential for the strategic decisions of the business, or if the remaining shares are spread over a large number of shareholders and the acquired shares de facto provides the buyer with a decisive influence on strategic decisions of the target undertaking.

13) Joint ventures/joint control – which transactions constitute mergers?

The following transactions regarding businesses subject to joint control may be subject to merger control if the joint venture is "full function":

1. Establishment of a joint venture;
2. Change from joint to sole control;
3. Dissolution – provided (part of) the business of the joint venture is transferred to one or more of the undertakings already controlling the joint venture or a third-party gaining control over it;
4. Change in or extension of the activities of a joint venture – provided that further assets, contracts, know-how, rights etc. are transferred to the joint venture to form the basis for the new activities if this enlargement entails the acquisition of the whole or part of another undertaking from the parents that would, considered in isolation, qualify as a merger;
5. Change in shareholders – for instance if one of the controlling undertakings sells its share in a joint venture to another undertaking, or if one of the controlling undertakings is acquired by another undertaking. In the latter case, the FCA may consider that the transaction results in two separate mergers and that these should be assessed separately with respect to who are parties to the transaction and whether the thresholds for merger filing are exceeded.

A joint venture which is not “full function”, because it does not, on a lasting basis, perform all the functions of an autonomous economic entity, is not subject to merger control but may be scrutinized under the general prohibition on anti-competitive agreements. Whether a joint venture is considered “full function” or merely “cooperative” depends on the level of the joint venture’s dependence on its parents and to what extent the joint venture has an independent presence in the market.

Even if a joint venture is “full function” and therefore subject to merger control (provided the thresholds are met), the general prohibition on anti-competitive agreements may also be applied if the joint venture has coordination of the market behaviour of the parent companies as object or effect.

14) Which thresholds decide whether a merger notification must be filed?
(Unless explicitly stated otherwise, the thresholds described under one threshold category are not cumulative with those described under another category. Thus for instance if there is a market share threshold and a turnover threshold, it is sufficient to meet one of these, unless stated otherwise.)

a) Turnover thresholds

A merger filing is required when the following turnover thresholds are met

1. The combined total annual worldwide turnover of all undertakings involved is greater than EUR 150 million,
2. the total annual turnover in France of each of at least two of the undertakings involved is greater than EUR 50 million, and
3. the transaction does not fall within the jurisdiction of the European Commission.

In addition, there are specific thresholds applying to certain businesses (see topic 15).

b) Market share thresholds

N/A

c) Value of transaction thresholds

N/A

d) Assets requirements

N/A

e) Other

N/A

15) Special thresholds for particular businesses

The thresholds mentioned in topic 14 apply to all transactions.

In addition, there are specific, lower thresholds for mergers involving undertakings operating retail stores and for mergers involving undertakings operating in certain French overseas departments and territories:

Retail stores:

Merger filing is required when at least two undertakings involved operate one or more retail outlets, (i) the combined annual worldwide turnover of all undertakings involved is greater than Euros 75 million, (ii) the total individual annual turnover in France, in the retail business sector, of each of at least two of the undertakings involved is greater than Euros 15 million, and (iii) the transaction does not fall within the jurisdiction of the European Commission. There are also special threshold for the retail sector in the French departments and territories (see below).

French overseas departments and territories:

Merger filing is required when at least two undertakings involved exercise their activity in one or more French overseas departments, in the department of Mayotte, the Wallis and Futuna islands or the overseas territories of Saint-Pierre et Miquelon, Saint Martin and Saint-Barthélémy, and (i) the combined annual worldwide turnover of all undertakings involved is greater than EUR 75 million, (ii) the total individual annual turnover in at least one of the French overseas departments or territories of each of at least two of the undertakings involved is greater than EUR 15 million, or EUR 5 million in the retail sector, without this threshold having to be met by all the undertaking concerned in the same French overseas department or territory, and (iii) the transaction does not fall within the jurisdiction of the European Commission.

16) Rules on calculation and geographical allocation of turnover

Article L. 430-2 V. of the French commercial code provides that rules on calculation and geographical allocation of turnover are those set out in Article 5 of the EUMR.  They are thus interpreted in accordance with the European Commission’s Consolidated Jurisdictional Notice.

The calculation of turnover shall reflect the economic strength of the undertakings concerned as a whole, not only that of the legal entities involved. As under EU merger control, where the merger consists in the acquisition of parts of one or more undertakings, only the turnover relating to the parts which are the subject of the merger (i.e., the target entity/entities) shall be taken into account.

For the acquirer(s), the turnover of the undertaking(s) concerned shall be taken into account, as well as the turnover of the undertakings forming a single economic unit with the undertaking(s) concerned: any direct or indirect parent companies, subsidiaries, joint ventures and subsidiaries of parent companies. The turnover a joint venture has with third parties must be divided equally between the controlling owners, irrespective of their share in the capital and the actual distribution of profit; i.e., if the shares in a joint venture are divided 60/40 between two participants who exercise joint control, half of the turnover of the joint venture must be attributed to each participant.

"Turnover" generally is the net turnover derived from sale of products and services within the undertaking’s ordinary activities in the last financial year, on the basis of the audited accounts, after deduction of (i) value added tax and other taxes directly related to the sales and (ii) any internal turnover between undertakings forming a single economic unit.

There are specific rules for calculating the turnover of credit and financial institutions, insurance undertakings, and in sectors where the sale of the service is made through intermediaries (see topic 17).

Turnover must be adjusted to take account of any divestments or acquisitions of businesses after the end of the financial year which the turnover calculation is based on.

Geographically, the relevant turnover is the one derived from products and services sold to customers based in France. The European Commission’s Consolidated Jurisdictional Notice contains special guidelines that also apply in this respect.

Is the seller/seller’s group turnover relevant in a standard acquisition of sole control?

No.

17) Special rules on calculation of turnover for particular businesses

State-owned undertakings

For the purposes of turnover calculation, Member States are not considered as undertakings.  Thus, for the purpose of turnover calculation, account is only taken of the turnover of the undertakings concerned (in which the State has an interest) and of the turnover of undertakings which belong to the same economic unit, having the same independent power of decision.

Insurance undertakings

For an insurance undertaking the value of the gross premiums written applies. This includes all premiums received and receivable in respect of insurance contracts issued by or on behalf of the undertaking, including reinsurance premiums.

Credit institutions and other financial undertakings

Turnover is calculated as the sum of:

1. Interest income and similar income
2. Income from securities (shares and other variable-yield securities, participating interests, etc.)
3. Commissions receivable
4. Net profit on financial operations
5. Other operating income.

Package holidays, advertising and other activities where the sale of the service is made through intermediaries

The turnover of the intermediary consists only of its commission, while for packaged holidays, the entire amount paid by the final customer is allocated to the tour operator which uses the travel agency as distribution network. In the case of advertising, the turnover of TV channels and magazines consists in the amounts received, less any commission of the media agencies, since the latter do not form part of a distribution network but are chosen by customers.

18) Series of transactions that must be treated as one transaction

Interdependent transactions are considered as one merger if (i) they are linked by conditions, (ii) they are carried out by the same acquirer and (iii) each qualifies, in itself, as a merger.

Furthermore, if the same parties enter into different transactions that are not interdependent within a two-year period, these transactions must be treated as one and the same merger arising at the date of the last transaction.

See also topic 19 regarding temporary control.

19) Temporary change of control

Under French merger control rules, merger filing is only required if there is a change of control on a lasting basis.

Thus, transitional transactions are not considered as entailing a change of control on a lasting basis if (i) the transitional nature of the transaction is agreed between the different acquirers in a legally binding manner and (ii) there is no doubt as to the speed of the second stage.

An example is where several undertakings jointly acquire control of another undertaking but according to a pre-existing plan, immediately after completion split the assets of the undertaking between themselves. In this situation, the temporary joint control will not be subject to merger filing, but the split-up of the assets may require one or several merger filings.

Another example of temporary control is where the head of a network of a group of independent traders acquires an operating company with a view to resell it, and where the acquisition by an identified acquirer is certain and will take place within one year. In such a case, only the second acquisition may be subject to merger filing.

Control may also be considered temporary in the situation mentioned in topic 20.

20) Special industries, owners or types of transactions

Under French merger control rules, which mirror the EURM’s, there is no obligation to file a merger notification where credit institutions, other financial undertakings or insurance companies whose normal activities include transactions and dealing in securities are temporarily in possession of interests in an undertaking acquired with the intention to resell, provided that they do not exercise voting rights for the purpose of determining the competitive conduct of that undertaking or they do exercise voting rights exclusively with the aim of preparing the disposal of all or part of that undertaking and that the disposal takes place within one year of the date of acquisition (“carry trade”).

21) Transactions involving only foreign businesses (foreign-to-foreign)

There is no exemption for foreign-to-foreign transactions. All transactions that meet any set of thresholds are subject to merger control regardless of where the undertakings concerned are registered, operate or own assets.

22) No overlap of activities of the parties

There is no exemption for transactions with no overlap of activities, but there is a simplified procedure available if there is no overlap (see topic 33).

23) Other exemptions from notification duty even if thresholds ARE met?

As a consequence of the EU "one-stop shop" principle, the French merger control rules do not apply if the thresholds for EU merger control are exceeded and the European Commission has not referred the merger to the FCA.

24) May a merging party file voluntarily even if the thresholds are not exceeded?

The FCA will only handle a merger notification if the thresholds are met or if a referral from the European Commission allows it to handle the notification. However, parties are encouraged to submit a pre-notification in case there are uncertainties as to whether their transaction is subject to merger control. 

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

Under the current legal framework, the FCA may not require a merger notification or oppose a transaction when the thresholds are not met.

26) Referral within the jurisdiction

There are no referrals within the French jurisdiction. 

27) Referral from another jurisdiction

The FCA cannot handle mergers based on referrals from other jurisdictions, except from the European Commission.

The European Commission may refer a merger or a part of a merger to the FCA. In that case, the FCA may handle the merger even if the thresholds for merger notification in France are not exceeded. In the case of a partial referral, the European Commission will handle certain (international) aspects of the merger, whereas the FCA will handle the strictly French aspects, i.e. in relation to French markets.

A referral of a merger from the European Commission may be requested either by the FCA, where applicable at the invitation of the European Commission, or by the merging parties (see topic 29).

28) Referral to another jurisdiction

If the thresholds for merger notification are met in at least three EU member states, the parties may request that a single merger notification is made to the European Commission in place of notifications to each of the relevant national authorities (see topic 29).

The FCA may also request the European Commission to examine a merger that does not have an EU dimension within the meaning of Article 1 of the EUMR but affects trade between EU Member States and threatens to significantly affect competition in France. Such a request shall be made within 15 working days of the date on which the merger was notified to the FCA. The European Commission shall immediately notify the other EU member states of the request and will decide whether to examine the merger within 25 days after this notification.

Besides referral to the European Commission, a merger cannot be referred to competition authorities in other jurisdictions.

29) May the merging parties request or oppose a referral decision?

Referral to the FCA:

If a merger is subject to EU merger control, the parties may – prior to an EU merger notification – make a “reasoned submission” to request the merger to be referred to the FCA, in whole or in part, provided that the merger may significantly affect competition in a distinct market in France. If the FCA does not oppose such referral within 15 working days of receiving the submission, the European Commission may decide, within 25 working days of receipt of the submission, to refer the merger in whole or in part to the FCA.

The European Commission may also, on its own initiative or upon request from the French Competition Authority, decide to refer a merger that has already been notified to the European Commission to the French Competition Authority. The FCA’s request must be submitted within 15 working days of the receipt of a copy of the notification filed by the notifying party to the European Commission. The merging parties cannot oppose such a referral decision.

Referral from the FCA:

If a merger is not subject to EU merger control but is subject to merger control in France and at least two other EU member states, the parties may make a “reasoned submission” to the European Commission to request that a single merger notification is made to the European Commission in place of notifications to each of the relevant national authorities. This submission shall be made before any official notification to the relevant National Competition Authorities. If none of the relevant authorities oppose the referral, the European Commission will handle the merger notification and no notifications will be needed in France or any other EU member state. If any of the national authorities in question oppose the referral within 15 working days, the merger must be notified to each of the relevant national authorities.

30) Stage of transaction when notification must be filed

A merger notification must be filed when the project is “sufficiently advanced”, i.e. a binding agreement or a letter of intent has been concluded, or a takeover bid has been published. There is no specific deadline, but the transaction shall be notified before its completion and it may not be implemented before the merger has been approved by the French Competition Authority, except if exempted (see topic 39).

The French Competition Authority will agree to handle a notification before a binding agreement has been concluded or a public takeover bid has been announced if the parties can demonstrate a good faith intention to conclude an agreement or – in case of a public takeover bid – if the parties have publicly announced an intention to make such a bid and no changes to the transaction may occur.  Should any change occur in the transaction, the parties have to re-notify the transaction.

31) Pre-notification consultations

First of all, the parties may approach the French Competition Authority’s Mergers Unit with a request for the appointment of a case team.

The pre-notification phase, which is optional, may also be entered into at the parties’ request, in particular (i) where there are uncertainties as to whether the transaction is subject to merger control, (ii) to anticipate complex discussions on market definition or competition analysis, or (iii) where the notifying parties intend to make a referral to the European Commission.

The French Competition Authority encourages pre-notification consultations, which increase the likelihood of the merger filing being declared complete on the day it is formally submitted. However, since July 2024, the French Competition Authority considers that pre-notifications are no longer necessary for mergers benefitting from the simplified procedure, which account for about 96% of the notified mergers.

Should the parties be concerned about the notifiability of a transaction, the Merger Unit will assess the evidence provided and may issue a comfort letter to inform the parties that no merger filing is required.

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

French merger control rules provide that, in the case of a merger carried out by purchase or exchange of securities in a regulated market, its effective completion occurs when the rights attached to the securities are exercised.  Thus, provided the voting rights are not used before the transaction is cleared by the FCA, the transfer of ownership of the securities benefits from an automatic exemption from the suspensive effect of merger control and may be implemented before such clearance.

Another case may result from the acquisition, through an over-the-counter agreement, of a “controlling interest” resulting in an obligation to file a takeover bid for the remaining capital pursuant to French financial law. Such inseparable two-steps securities transfer transactions may be notified at the stage of the conclusion of the over-the-counter agreement or after the launch of the takeover bid, where the merger is irrevocable.

Please also note that special regulations apply for acquisitions on stock exchanges and public takeover bids, including a requirement for approval of offer documents from the Financial Market Authority prior to being made available to the public.

33) Forms available for completing a notification

There are four forms available, one for full notifications and three for simplified notifications: one for simplified notifications in the food distribution sector, one for simplified notifications in the automobile distribution sector, and one for other simplified notifications (no horizontal overlap nor vertical or conglomerate link). All forms are only available in French (see links under topic 3).

Simplified notification is possible in each of the following cases:

1. Where the combined market share of the undertakings concerned is less than 25% in markets consistently defined by past decisions;
2. In the case of an overlap in the economic activities of the parties, where the combined market share of the undertakings concerned is less than 50% and the addition of the market shares resulting from the transaction is less than 2 percentage points in markets consistently defined by past decisions;
3. In the case of presence on vertically related markets, where the combined market share of the undertakings concerned in those markets, which are consistently defined by past decisions, is less than 30%;
4. In the case of presence on related markets, where the individual market shares of the undertakings concerned in the related markets, which are consistently defined by past decisions, are less than 30%;
5. in the case of acquisition of sole control of undertakings, where the acquirer exercised joint control of the target prior to the transaction;
6. Where the transaction consists in the creation of a full-function joint venture whose economic activity is only outside of France; and
7. Where the transaction concerns the acquisition of joint control of a real estate asset for sale in a future state of completion.

Note, however, that the French Competition Authority may always request a full notification, even if the conditions for simplified notification are met. In this case, a full notification will be required before the parties can obtain an acknowledgement of receipt of the file, which triggers the time limit for the FCA to review the file.

34) Languages that may be applied in notifications and communication

French.

35) Documents that must be supplied with notification

The following documents should always be supplied with a merger notification:

1. Where applicable, the mandate of the advisors or persons responsible for the notification,
2. A copy of the documents that bring about the merger (Share Purchase Agreements, shareholder agreement etc.) and the minutes of the deliberative bodies relating to the merger, accompanied, if necessary, by a translation into French of these documents,
3. The accounts and, if applicable the consolidated accounts and the latest annual report, of each of the undertakings concerned
4. A summary table of financial data for the last three financial years ended, or the last one in case of a simplified notification,
5. A declaration as to the completeness and accuracy of the information provided in the notification file.

For mergers where the relevant markets are affected, a range of further documents are required, including  economic analyses, reports, minutes of board meetings and similar documents related to the merger.

36) Filing fees

There are no filing fees for merger filings to the FCA.

37) Is implementation of the merger before approval prohibited?

Yes. The merging businesses must be run separately and independently until the merger has been approved. However, normal preparatory and reversible steps are not prohibited (see topic 39).

Please also see topic 32 regarding public takeover bids and acquisitions on stock exchanges.

38) May the parties get permission to implement before approval?

The parties may request the French Competition Authority to exempt the transaction from the prohibition of implementation before approval.  This may for instance be the case for takeover bids for undertakings in receivership or liquidation.

When submitting the notification file or at a later stage, the parties may thus make a separate request for exemption, which must specify the reasons for the exemption request.

The granting of an exemption does not prejudice the French Competition Authority’s final decision. The Authority may thus impose remedies or even block the transaction if it harms competition.

Moreover, exemption decisions are null and void if, within three months of the completion of the transaction, the French Competition Authority has not given its acknowledgement of receipt of the notification file, stating that it is complete.

39) Due diligence and other preparatory steps

An explicit exemption is not required for standard due diligence and other preparation measures without any structural change on the market.

There are no guidelines on what may be considered acceptable preparatory steps. As a rule of thumb, the French Competition Authority considers that the conclusion of memoranda of understanding between the acquirer and the target to govern their relationship for the period up to the clearance of the transaction, for example to protect the value of the acquirer’s investment, is acceptable.

However, the parties should refrain from exchanging commercially sensitive information. They must continue to act as independent undertakings defending their respective interests, rather than acting as a single entity sharing the same economic objectives.  In particular, the acquirer should refrain from interfering in the internal management of the target or reducing its autonomy.

40) Veto rights before closing and "Ordinary course of business" clauses

An "ordinary course of business" clause which prevents the target company from taking decisions outside the course of its ordinary business until the closing date is generally considered acceptable, as it aims at preserving the acquirer’s investment in the target.

However, should the acquirer exercise veto rights over the strategic decisions of the target, this will be considered as a prohibited early implementation of the transaction (see topic 42).

41) Implementation outside the jurisdiction before approval – "Carve out"

There are no specific rules on “carve out” of the French part of a transaction to avoid delaying implementation in the rest of the world pending approval in France.

It must be assessed on a case-by-case basis whether it is possible to carve out the French part of a transaction. If the French part of the transaction and the rest of the transaction are interdependent, it is advisable to request a specific permission to implement outside France from the French Competition Authority (see topic 38).

42) Consequences of implementing without approval/permission

The parties may be fined if their merger, not benefiting from an exemption (see topic 38), is implemented before approval is obtained.

The amount of the fine may not exceed, for natural persons, EUR 1.5 million and, for legal entities, 5% of their turnover excluding taxes realised in France during the last financial year and increased, where applicable, by the turnover realised in France during the same period by the acquired party.

43) Phases and deadlines

44) Tests or criteria applied when a merger is assessed

The FCA assesses whether the merger is likely to impede competition, in particular by the creation or strengthening of a dominant position or by the creation or strengthening of buyer power placing suppliers in a situation of economic dependence.

The FCA also assesses whether the merger brings a sufficient contribution to economic progress to offset its negative effects on competition, in particular through efficiency gains.

A range of factors may be taken into consideration, including whether one of the parties is likely to fail as an independent business (failing firm defense).

45) May any non-competition issues be considered?

The FCA’s assessment is based exclusively on competition issues. However, the Minister of the Economy has a call-in power for reasons of general interest, which may be exercised after the FCA has issued a Phase II decision.  Such general interest considerations include industrial development, the international competitiveness of the undertakings concerned or employment creation and maintenance (see topic 43). 

46) Special tests or criteria applicable for joint ventures

The assessment for joint ventures is the same as for other mergers, but if the joint venture also has coordination between the owners as object or effect, it will also be assessed whether such coordination is acceptable under the general prohibition of anti-competitive agreements.

47) Decisions and remedies/commitments available

A merger may be approved, approved with conditions/commitments or prohibited.

If the French Competition Authority expresses serious concerns about the merger, it is important that the parties enter into negotiations of possible commitments well before the expiry of the deadlines, as the authority will normally only consider an approval with conditions if the parties have offered commitments.

Commitments may take any form and they can be either structural or behavioural and with or without time limitations.

The authority may revoke an approval if at any time it becomes aware that incorrect or misleading information has been provided by the parties or if the parties do not comply with the conditions/commitments contained in the clearance decision.

48) How and when will details about the merger be published?

The French Competition Authority makes a public announcement when it has received a merger notification and again when a decision has been taken. The latter announcement will include a non-confidential version of the decision. The level of detail of decisions varies considerably, especially between decisions adopted further to a simplified or full merger notification.

Time and content of announcements will be coordinated with the parties. To protect business secrets, the parties are requested to provide a non-confidential description of the transaction with the notification and to identify any confidential information in the notification and the final decision.

49) Access to the file for the merging parties and third parties

The merging parties:

The merging parties have a right to access to the file, which includes correspondence with third parties that the French Competition Authority may have had, including market survey questionnaires as well as an overview of all documents/correspondence in the file. However, the authority may redact third parties’ confidential information, often including the identity of such third parties. There is no right of access to the authority’s internal documents and correspondence.

Third parties:

Third parties do not have access to the file, as documents held or created by the FCA in the course of its investigation and decision-making powers may not be communicated to the public. 

However, third parties are invited to submit their comments on the public statement in relation to the merger which the FCA shall publish on its website within 5 working days from the notification or referral. The public statement includes the following:

1. The names of the undertakings concerned and of the groups to which they belong,
2. The nature of the transaction (merger, acquisition, creation of a joint venture),
3. The economic sector(s) concerned,
4. The time-limit for third parties to submit their comments on the merger (usually, 15 working days from the date of the statement’s publication),
5. A non-confidential summary of the merger,
6. If applicable, the indication that the merger has an EU dimension and was referred to the FCA by the European Commission.

50) Who can appeal and what may be appealed?

The merging parties can generally appeal any decisions by the French Competition Authority or by the French Minister of the Economy (see topics 43 and 45) before the French Administrative Supreme Court (Council of State), including conditions contained in a clearance decision – even if they are based on commitments suggested by the parties themselves.

Third parties who have an interest may also appeal decisions under the French merger control rules.