An international acquirer identifies a mid-market target in France. The commercial logic is sound. The price is agreed. Then the regulatory dimension emerges – and the timeline that looked manageable begins to stretch. Competition clearance, sector-specific filings, and closing conditions embedded in the share purchase agreement (SPA) each carry their own procedural clock. Missing a single step can invalidate the deal or expose the buyer to significant liability.
This case study describes how Ferraz & Whitmore supported a cross-border M&A transaction in France involving regulatory conditions and competition clearance requirements. The matter centred on a foreign acquirer purchasing a majority stake in a French société par actions simplifiée (SAS), with the transaction subject to merger control review under French commercial legislation (Code de commerce). Clearance was obtained and closing conditions were satisfied within a defined timetable, allowing the transaction to proceed without material delay.
This case study sets out the client situation, the strategy employed, key milestones, complications encountered along the way, and three transferable lessons for advisers and acquirers approaching similar cross-border transactions in France.
Client profile and the challenge at hand
The client was a European holding company – itself structured as a Portuguese sociedade anónima – seeking to acquire a controlling interest in a French technology services business. The target was incorporated as a société par actions simplifiée (SAS), a corporate form widely used in France for its structural flexibility. The client had no prior operational presence in France and had not previously engaged with French merger control procedures.
The transaction raised three concurrent challenges. First, the combined turnover of the parties triggered the notification thresholds under French competition legislation, requiring a filing with the Autorité de la concurrence (French Competition Authority) before closing could occur. Second, the target operated in a sector subject to a separate foreign investment screening mechanism under French investment legislation, meaning an additional ministerial authorisation was required. Third, the SPA contained representations and warranties tied to the regulatory clearances, with a long-stop date that created genuine time pressure.
The client's internal team had experience with common law acquisition structures. The civil law environment of France – and in particular the interaction between Code de commerce provisions governing concentrations and the foreign investment screening rules – was unfamiliar territory. The risk of losing the transaction window by mismanaging the sequencing of filings was real.
For a detailed overview of M&A deal structures available to foreign acquirers in France, see our M&A advisory service for France.
Strategy, sequencing, and key milestones
The engagement began with a structured due diligence phase covering corporate, regulatory, and employment law dimensions. This confirmed the notification obligation and identified the foreign investment screening requirement. It also surfaced a pre-existing minority shareholder with a right of first refusal under the target's statuts (constitutional documents) – a complication not flagged in the initial data room.
The strategy rested on three sequenced steps. First, the minority shareholder issue was addressed before any regulatory filing. Counsel drafted a waiver mechanism under French corporate legislation, and the shareholder confirmed non-exercise of the right within the agreed period. This cleared the path for a clean SPA execution.
Second, the competition filing was prepared in parallel with the foreign investment screening application. Both processes run on separate tracks under French law, but coordinating them against the SPA long-stop date required careful calendar management. The competition filing was submitted first, as the Autorité de la concurrence operates on a defined statutory timetable from the date of complete notification.
Third, the SPA closing conditions were drafted to distinguish between conditions that could be waived by the parties and those that were absolute – specifically, the competition clearance and the ministerial authorisation. This distinction proved important when a minor documentation gap arose during the screening process.
Key milestones proceeded as follows. The SPA was executed with all closing conditions clearly identified. The competition filing was submitted within two weeks of signing. A Phase I review was completed by the Autorité de la concurrence without remedies being required. The foreign investment screening authorisation was granted at the ministerial level within the statutory period. The huissier de justice (court-appointed bailiff in French procedural law) was instructed to formalise the share transfer at closing in accordance with French civil procedure requirements. Closing occurred before the long-stop date.
To understand how French corporate governance rules interact with acquisition structuring, our corporate law advisory service for France provides further context.
Complications encountered and how they were addressed
Three complications arose during execution. Each is worth examining because each reflects a pattern that recurs in cross-border French M&A matters.
The undisclosed right of first refusal. The minority shareholder's right emerged from a shareholders' agreement that had not been included in the initial data room. It was identified during legal due diligence through a review of the target's corporate records. The resolution required a separate negotiation with the minority holder, conducted under time pressure. The lesson is that French corporate legislation imposes formality requirements on shareholder agreements, but older agreements are not always systematically filed or disclosed. Thorough due diligence of historical corporate documents – including amendments to the statuts – is essential.
The documentation gap in the foreign investment screening process. The ministerial review process requested supplementary information on the acquirer's ultimate beneficial ownership structure. This arose because the Portuguese holding company itself had a complex ownership chain involving entities in two other jurisdictions. The delay was contained by having prepared a complete beneficial ownership analysis as part of the initial filing package. Even so, responding to the supplementary request consumed approximately three weeks. Transactions involving multi-layered acquirer structures should anticipate this scenario and pre-build the documentation.
Representations and warranties tension at closing. As the long-stop date approached, the seller sought to argue that one of the regulatory conditions had been "substantially satisfied" and that the parties should proceed to closing. The SPA language did not support this interpretation. The closing conditions relating to competition clearance and ministerial authorisation were unconditional – they either existed or they did not. French courts, including the Cour de cassation (Supreme Court for private law matters in France), have consistently held that contractual conditions precedent must be strictly interpreted. The position was maintained, the authorisation was received before the long-stop date, and closing proceeded on the agreed terms.
Three transferable lessons
Lesson 1: Map all regulatory tracks before signing. French M&A transactions can engage multiple parallel regulatory processes – merger control, foreign investment screening, sector-specific authorisations – each with its own timetable. Identifying all applicable tracks before the SPA is signed allows the parties to set a realistic long-stop date and to draft closing conditions that reflect actual requirements. Signing without this map creates misaligned expectations and timeline risk.
Lesson 2: Treat due diligence as a risk-discovery exercise, not a confirmation exercise. The undisclosed right of first refusal and the beneficial ownership documentation gap both emerged from thorough due diligence conducted without assumptions. A cross-border acquirer engaging a law firm in France for the first time should expect that the due diligence scope covers not only financial and commercial matters but also historical corporate records. Shareholder agreements. Additionally, the acquirer's own regulatory profile as it will appear to French authorities.
Lesson 3: Draft closing conditions with legal precision. The tension over the "substantially satisfied" argument at closing was resolved because the SPA language was unambiguous. In French commercial practice, conditions precedent embedded in a share purchase agreement are interpreted strictly under civil law principles. Vague or qualified language creates room for dispute at the worst possible moment. The representations and warranties in the SPA must be drafted to reflect exactly what each party is promising – and exactly what must occur before closing is obligatory.
For a comparative perspective on how similar regulatory conditions are handled in cross-border M&A transactions in Portugal, see our case study on M&A transactions in Portugal.
To explore a tailored legal strategy for your M&A transaction in France, contact us at info@ferrazwhitmore.com.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our M&A practice supports cross-border acquisitions in France and across Europe, combining Portuguese civil law expertise with English common law tradition. We advise on deal structuring, due diligence, SPA negotiation, regulatory filings, and closing mechanics across both SARL and SAS structures. Our attorneys have advised on transactions subject to competition clearance and foreign investment screening in multiple civil law systems, and the firm participates in cross-border M&A practice groups across Europe. Engaging a lawyer in France with genuine cross-border M&A experience materially reduces execution risk on complex multi-track transactions. As an international law firm with deep France capability, Ferraz & Whitmore provides the coordinated advisory support that cross-border buyers need from signing through closing. To discuss your transaction, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.