MONACO Law and Practice Contributed by: Stephan Pastor, Emeline Elbaz-Mondeux and Coralie Trudon, CMS Pasquier Ciulla Marquet Pastor & Svara
6.3 Consideration Cash is more commonly used as consideration than shares in Monaco since most sellers do not have a strategic goal when selling and rather wish to retrieve some liquidity. In deal environments with high valuation uncertainty, the parties have resorted to earn-out or price sup - plement where usually only a fixed price was offered. Such additional price is usually stipulated when the initial price is low, or when the buyer wishes to ensure the seller’s support or if the seller wishes to supple - ment his or her income (eg, for his or her retirement). These clauses are difficult to draft, and their scope of application is not easy to determine. 6.4 Common Conditions for a Takeover Offer There are no restrictions imposed by regulators regarding the use of offer conditions by a bidder. As Monaco companies are all private, such conditions are usually negotiated directly between the bidder and the target company’s shareholders, before being integrated into the share/asset purchase agreement concluded between the parties. The most common conditions relate to: • the approval of the takeover by the government (where the bidder is a foreign company or a natural person); • the approval of other regulators such as the ACPR and the CCAF for M&A deals involving a bank and/or an asset management company (or other government bodies in case the target is regulated), or from the French Competition Authority should the merger/acquisition consist of a “concentration” with worldwide turnover and turnover generated in France exceeding the thresholds provided for by French law; and • the obtaining of financing, should the merger/ acquisition be financed by a banking loan. Conditions also apply to the approval of the operation by the shareholders’ assembly as well as the board of directors, where applicable.
the pandemic and in particular an interim accounting situation of the target company at the due diligence stage. 5.4 Standstills or Exclusivity Standstills are not in great demand in the Monaco M&A market. Exclusivity is more usual, as Monaco companies are most commonly controlled by a small number of shareholders, often within the same family, with whom the finally selected bidder usually negoti - ates a limited exclusivity period for the last steps of the deal. Confidentiality clauses remain the most usual ones due to the very small size of the Principality and It is permissible for tender offer terms and conditions to be documented in a definitive agreement. Indeed, most Monaco companies are owned by a very lim - ited number of shareholders holding the majority of the shares, so potential buyers wishing to gain con - trol over a target entity generally contact the majority shareholders and agree the terms of a share purchase agreement. its limited number of residents. 5.5 Definitive Agreements 6. Structuring 6.1 Length of Process for Acquisition/Sale As in nearby jurisdictions, the duration of the pro - cess in Monaco depends on various factors such as the knowledge of the target company’s business by a potential acquirer, the scope of the due diligences required, or the need to obtain financing. It is also subject to the duration of the government approval process, in the event of a transaction involving foreign investors. Based on the above, the process for acquir - ing/selling a business in Monaco generally takes two months minimum. In 2025, there was no applicable legislation framing the suspension of time limits. 6.2 Mandatory Offer Threshold There is no mandatory offer threshold under Monaco law.
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