How to Acquire a French Company in 2026: Step‑by‑step M&A Guide

Understanding how to acquire a French company has become more nuanced in 2026, following two landmark legislative developments that reshape the deal landscape for domestic and cross‑border buyers alike. The Loi de simplification de la vie économique, adopted in April 2026, significantly raised the turnover thresholds that trigger a mandatory merger notification to the Autorité de la concurrence, freeing many mid‑market transactions from a filing obligation that previously applied. At the same time, the Finance Act 2026 (Loi de finances pour 2026) introduced fresh tax measures affecting reorganisation charges, withholding obligations and asset‑transfer duties, all of which feed directly into the share‑versus‑asset structuring decision every buyer must make.

This guide walks corporate acquirers, private‑equity sponsors and in‑house deal teams through each stage of the acquisition process in France, from route selection and merger‑control analysis to due diligence, documentation, closing and post‑completion integration.

Pre‑deal planning and acquisition routes: how to buy a business in France

Before signing a letter of intent, buyers must choose among three principal acquisition routes available under French law. The choice has far‑reaching consequences for liability exposure, tax treatment, employment‑transfer mechanics and regulatory filings. Foreign buyers should note that there is no nationality restriction on acquiring a French company, any natural or legal person, regardless of domicile, may purchase shares or assets, subject to sector‑specific foreign‑investment screening (notably the prior‑authorisation regime administered by the Ministry of the Economy for sensitive sectors).

Share acquisition, benefits and risks

A share purchase (cession de titres) is the most common route for acquiring control of a French société par actions simplifiée (SAS) or société à responsabilité limitée (SARL). The buyer steps into the target’s legal shoes, inheriting all contracts, employees, permits and, critically, all historical liabilities, whether known or latent. The key advantages are simplicity of transfer (no need to novate individual contracts) and the ability to benefit from the target’s existing tax attributes, including carried‑forward losses in certain conditions. Risks centre on undisclosed liabilities, which must be managed through comprehensive warranties and, where appropriate, escrow or earn‑out mechanisms.

Asset purchase / fonds de commerce, when preferred

An asset deal, typically structured as the sale of a fonds de commerce (goodwill, trade name, customer base, leases, equipment), allows the buyer to cherry‑pick assets and leave unwanted liabilities behind. This route is frequently preferred by buyers seeking to acquire a specific business line rather than an entire corporate entity. Asset purchases trigger specific French‑law formalities, including creditor‑opposition periods and registration duties (droits d’enregistrement). Employees attached to the transferred business automatically transfer to the buyer under Article L. 1224‑1 of the Code du travail, regardless of the parties’ wishes.

Hybrid and holdco structures

Cross‑border buyers frequently interpose a French or Luxembourg holding company to optimise financing, repatriate dividends and access the EU parent‑subsidiary directive. Industry observers expect the Finance Act 2026 M&A measures, particularly the tightened transfer‑pricing documentation requirements, to make holdco structuring more complex but no less attractive, provided buyers model the tax costs at the outset. A hybrid approach, acquiring shares of the operating company while simultaneously carving out real‑estate assets into a separate société civile immobilière (SCI), remains a standard planning tool.

Pre‑LOI checklist for buyers:

• Target identification memo. Sector analysis, competitive landscape and regulatory‑screening requirements.
• Preliminary valuation. EBITDA multiples, net‑asset value, or discounted‑cash‑flow model.
• Route‑selection matrix. Share vs asset vs hybrid, scored on liability risk, tax efficiency, speed and employment impact.
• Foreign‑investment screening. Determine whether the target operates in a sector subject to prior authorisation under French FDI rules.
• NDA and data‑room access. Negotiate confidentiality terms and secure access to key financial and legal documents.

Merger control and notification, 2026 thresholds, filing process and timing

France operates a mandatory, suspensory merger‑control regime. A transaction that meets the applicable turnover thresholds must be notified to the Autorité de la concurrence before completion, and the parties may not close until clearance is obtained. The April 2026 reforms introduced by the Loi de simplification de la vie économique represent the most significant changes to France’s merger control thresholds in over a decade, and every buyer planning a deal in 2026 must recalibrate its notification analysis accordingly (Autorité de la concurrence, press release, 16 April 2026).

Who must notify, parties and turnovers

Under the revised regime, a concentration must be notified to the Autorité de la concurrence when the combined worldwide turnover of the parties exceeds the aggregate threshold set by the new law, and at least two of the parties each achieve individual turnover in France above the domestic threshold. The April 2026 increase raises both the aggregate and the individual French‑turnover thresholds substantially, a change the Autorité itself welcomed as a way to refocus its resources on transactions that genuinely affect competition in France (Autorité de la concurrence, press release, 16 April 2026). Sector‑specific thresholds (retail and overseas territories) also received adjustments.

The likely practical effect is that many mid‑market deals, particularly those involving targets with limited French revenues, will fall below the new thresholds and no longer require a notification. However, the Autorité retains a call‑in power (pouvoir d’évocation) enabling it to require a filing for transactions that fall below the thresholds but may harm competition in France (Autorité de la concurrence, guidance on call‑in power).

When to notify, timing and suspensory rules

France’s regime is suspensory: parties must not implement the concentration, whether by exercising voting rights, integrating operations or exchanging competitively sensitive information, before obtaining clearance. There is no fixed statutory deadline for filing, but early engagement with the Autorité is strongly recommended, especially for complex cases. Parties typically file after signing the acquisition agreement but before any conditions precedent have been satisfied. Gun‑jumping (closing before clearance) can result in substantial fines and, in extreme cases, an order to unwind the transaction.

Filing mechanics and typical timelines

The notification dossier is submitted to the Autorité’s Merger Division and must contain prescribed information including identification of the parties, description of the transaction, affected markets and competitive analysis. Early indications suggest that the Autorité’s review timelines remain broadly consistent with prior practice:

• Phase I review. The standard review period runs for 25 working days from receipt of a complete notification. The Autorité may clear the transaction unconditionally, clear it subject to commitments, or open an in‑depth Phase II investigation.
• Phase II review. If opened, Phase II adds a further period (typically 65 working days, extendable) for a detailed competitive assessment. Phase II investigations are relatively rare.
• Pre‑notification contacts. The Autorité encourages informal pre‑notification discussions, which can significantly reduce the risk of the formal clock being stopped for information requests.

The merger filing requirements in France also include payment of a filing fee, the amount of which is set by decree and depends on the combined turnover of the parties.

Remedies and clearance outcomes

Where the Autorité identifies competition concerns, it may accept behavioural or structural commitments (such as divestiture of overlapping business lines) in exchange for clearance. Outright prohibitions are rare but not unprecedented. Buyers should factor the potential need for remedies into their deal timeline and SPA conditionality.

Comparison: filing obligations by transaction type (post‑April 2026)

Tax rules and Finance Act 2026, implications for deal structure

Tax considerations are central to every acquisition process in France. The Finance Act 2026 introduced several measures that directly affect how buyers and sellers structure M&A transactions, negotiate price adjustments and manage post‑closing tax exposures. Buyers who overlook these changes risk sub‑optimal structuring and unexpected liabilities.

Key Finance Act 2026 measures for acquisitions

The Finance Act 2026 M&A provisions touch multiple areas relevant to deal structuring. Industry observers highlight the following as the most consequential for buyers:

• Registration duties on asset transfers. Adjustments to the rates and brackets of droits d’enregistrement on transfers of fonds de commerce and real property may shift the balance between share and asset deals for certain transaction sizes.
• Withholding‑tax rules. Amendments to withholding obligations on dividends and interest payments to non‑resident parent companies may affect the cost of repatriating profits through a newly acquired holdco structure.
• Transfer‑pricing documentation. Enhanced documentation requirements for related‑party financing, particularly acquisition debt pushed down into the target, demand more rigorous arm’s‑length analysis at the planning stage.
• Reorganisation tax neutrality. Conditions for benefiting from the régime spécial des fusions (tax‑neutral reorganisation regime) have been refined, which is relevant for buyers planning post‑closing mergers or spin‑offs.

Tax modelling checklist

When deciding how to acquire a French company, buyers should model the tax outcomes of each route before signing a letter of intent. A practical tax‑modelling checklist includes:

1. Compare effective tax rates for a share purchase versus an asset purchase, factoring in registration duties, VAT and capital‑gains tax.
2. Model the availability and utilisation of the target’s carried‑forward tax losses under the applicable changement d’activité and ownership‑change rules.
3. Assess withholding‑tax costs on dividend distributions and interest payments under applicable double‑taxation treaties and the Finance Act 2026 amendments.
4. Quantify the benefit of any step‑up in asset basis available through an asset deal, and weigh it against the higher upfront transaction taxes.
5. Review transfer‑pricing exposure for any acquisition‑debt push‑down or management‑fee arrangements with the buyer group.

Deferred tax, step‑up and loss utilisation in France

In an asset purchase, the buyer generally obtains a stepped‑up tax basis in the acquired assets, enabling higher depreciation charges and, over time, a lower effective tax burden. In a share deal, the target’s existing tax basis carries over, but so do any carried‑forward losses, provided the conditions for utilisation (including continuity‑of‑activity tests) remain satisfied. The Finance Act 2026 tightened several of these conditions, making early tax due diligence even more critical. Early indications suggest that buyers should obtain written confirmation from the target’s tax advisers regarding the status and quantum of any loss carry‑forwards before relying on them in their valuation model.

Negotiation tip: where a significant deferred‑tax asset exists in the target, buyers often negotiate a specific tax indemnity in the SPA, backed by an escrow or bank guarantee, to protect against subsequent disallowance of the losses by the French tax authorities.

Buy‑side due diligence: commercial, legal, employment, IP, tax and regulatory checks

Thorough buy‑side due diligence in France must address several country‑specific issues that differ materially from Anglo‑Saxon practice. French employment law, commercial lease regimes and the fonds de commerce concept all create traps for the unwary buyer. The scope of diligence should be agreed in the LOI stage and reflected in a detailed request list provided to the seller.

Employment and social charges

French labour law is protective of employees. Under Article L. 1224‑1 of the Code du travail, all employment contracts attached to a transferred economic entity automatically transfer to the buyer by operation of law, whether the deal is structured as a share or asset purchase. Buyers must diligence:

• Applicable collective bargaining agreements (conventions collectives) and company‑level agreements.
• Outstanding employee claims, pending prud’hommes proceedings and social‑security audits.
• Profit‑sharing and incentive plans (participation, intéressement), which create financial liabilities that transfer with the workforce.
• Works‑council (comité social et économique, CSE) consultation obligations, which must be completed before closing in share deals and before certain asset‑deal steps.
• Key‑employee retention risks and any change‑of‑control triggers in executive contracts.

Real estate and commercial lease (bail commercial)

The French commercial‑lease regime grants tenants significant statutory protections, including the right to renewal and compensation for non‑renewal (indemnité d’éviction). Buyers should review lease terms, rent‑review mechanisms, sub‑leasing restrictions and any pending disputes with landlords. In an asset deal, the lease of the premises forming part of the fonds de commerce transfers to the buyer, but the landlord must be notified and may impose conditions.

Contracts, licences and IP

Not all contracts are freely assignable under French law. Buyers should identify key commercial agreements that contain change‑of‑control or non‑assignment clauses, as well as licences, permits and accreditations that may require re‑application. Intellectual‑property rights, trademarks registered with the INPI, patents, software, should be verified for ownership, scope and any encumbrances or pending disputes. GDPR compliance is an increasingly important diligence item, particularly for targets that process large volumes of personal data.

Tax due diligence focuses

Beyond the macro structuring questions addressed in the tax section above, granular tax due diligence for a French target should cover:

• Open tax years and the status of any ongoing tax audits or assessments.
• VAT recovery positions and any pending claims or adjustments.
• Transfer‑pricing arrangements with related parties and compliance with documentation requirements.
• Deferred‑tax positions, including the quantum and recoverability of loss carry‑forwards.
• Compliance with the contribution économique territoriale (CET) and other local taxes.

Transaction documents, warranties and closing mechanics

French M&A transactions follow a documentation sequence that will be broadly familiar to international practitioners, though certain French‑law specifics require careful handling. The acquisition process in France typically moves through heads of terms, exclusivity, due diligence, SPA or APA negotiation, signing, satisfaction of conditions precedent and closing.

Practical clauses for merger control (suspensory conditions)

Where the merger filing requirements in France are triggered, the SPA must include a condition precedent (condition suspensive) making closing contingent on obtaining clearance from the Autorité de la concurrence, and, where applicable, from the European Commission or other national authorities. Best practice is to define clearly the scope of remedies the buyer is willing to accept (or reject) as a condition of clearance, and to allocate the risk of a prohibition or prolonged review between the parties. A well‑drafted long‑stop date, typically set at six to nine months from signing, provides certainty and protects both sides against regulatory delay.

Typical price adjustment mechanisms

French share‑purchase agreements commonly employ one of two price‑adjustment methods: a locked‑box mechanism (where the price is fixed at a reference date and adjusted only for identified “leakage”) or a completion‑accounts mechanism (where the price is adjusted post‑closing based on net working capital, net debt and other agreed metrics). Locked‑box structures are increasingly popular for their certainty, while completion accounts remain standard where there is significant intra‑signing volatility.

Escrow and warranty caps

Seller warranties (déclarations et garanties) in French SPAs typically cover financial statements, tax, employment, litigation, environmental and regulatory matters. Buyers negotiate warranty caps (often expressed as a percentage of the purchase price), de minimis thresholds and time limits for claims. An escrow, often held by a French notary or a bank, provides a ring‑fenced fund for warranty and indemnity claims. Industry observers report that escrow amounts in French mid‑market deals typically range from 10 to 20 per cent of the enterprise value, released in tranches over 18 to 24 months post‑closing.

Post‑closing integration, employment transfers and filings

Closing the transaction is not the end of the buyer’s compliance obligations. A structured post‑closing integration plan is essential, particularly for cross‑border M&A in France where employment, regulatory and administrative requirements demand prompt attention.

Employment transfer checklist

• Day‑one employee communications. Inform all transferred employees of the identity of the new employer, applicable collective agreements and any changes to working conditions.
• Social‑security registrations. Register with URSSAF and update payroll declarations for the transferred workforce within applicable deadlines.
• CSE information and consultation. Complete any outstanding works‑council consultation steps required under the Code du travail.
• Harmonisation planning. Assess whether existing company‑level agreements must be renegotiated within the 15‑month transitional period prescribed by law for merging collective statuses.

Regulatory notifications and filings

• Commercial‑register update. File amendments to the Registre du commerce et des sociétés (RCS) to reflect the change of ownership and any new directors.
• Intellectual‑property transfers. Record assignments of trademarks, patents and domain names with the INPI and relevant registries.
• Sector‑specific notifications. Depending on the target’s industry, notify relevant regulators (e.g., ACPR for financial services, ARCEP for telecoms, ARS for healthcare).
• Post‑merger antitrust obligations. Comply with any behavioural or reporting commitments imposed by the Autorité de la concurrence as conditions of clearance.
• Foreign‑investment post‑closing report. Where prior FDI authorisation was obtained, submit any required post‑closing compliance reports to the Ministry of the Economy within the stipulated deadlines.

Penalties for late or incomplete filings vary by register and regulator, but can include fines, injunctions and, in the most serious cases, criminal sanctions for directors. Buyers should build a comprehensive filing calendar at signing and assign clear responsibility for each item.

Conclusion: planning your acquisition of a French company in 2026

Knowing how to acquire a French company in 2026 requires a command of the revised merger control thresholds introduced by the Loi de simplification de la vie économique, a clear understanding of the Finance Act 2026 tax measures that influence deal structuring, and disciplined execution across due diligence, documentation and post‑closing integration. The April 2026 reforms have created a more permissive notification environment for mid‑market buyers, but the Autorité’s retained call‑in power means that a considered competition analysis remains essential for every transaction. Equally, the Finance Act 2026 changes demand that tax modelling is no longer an afterthought but an integral part of the route‑selection decision from the earliest planning stage.

This guide provides general information about the acquisition process in France and is not a substitute for legal advice tailored to a specific transaction. Buyers considering a cross‑border M&A deal in France should engage qualified French legal counsel to navigate the regulatory, tax and employment complexities outlined above.

Sources

1. Autorité de la concurrence, press release (16 April 2026)
2. Autorité de la concurrence, guidance on call‑in power
3. Latham & Watkins, Merger Control in France (April 2026)
4. Cleary Gottlieb, France Raises Merger Control Notification Thresholds (April 2026)
5. ICLG, M&A Laws & Regulations France (2026)
6. Thomson Reuters Practical Law, Key Documents for Acquiring a Private Company
7. Legifrance, Official texts (Loi de simplification de la vie économique 2026 and Finance Act 2026)
8. Legal 500, France Merger Control Guide