FRANCE LAW AND PRACTICE Contributed by: Michael Doumet, François-Xavier Naime, Guillaume Nataf, Léna Sersiron, Eléonore d’Anthonay, Nella Picou, Pauline Celeyron and Magalie Dansac Le Clerc, Baker McKenzie Paris
EU foreign subsidies regulations (please refer to 6. Antitrust/Competition ), other regulatory or govern - mental approvals might be required on a case-by- case basis – depending upon, notably, the relevant industry and the deal structure (eg, transfer of opera - tional permits). In addition, if a company has a works council ( Comité Social et Économique , or CSE) – man - datory for companies with more than 50 employees – and its shares are sold or it sells its assets/business, management must consult the works council on the proposed transaction, which may affect overall timing. French Hamon law requires that any SME where at least 50% of the shares are sold or that sells its assets/business individually must notify each of its employees of such sale, allowing the employees to submit a purchase offer on the shares or the assets/ business. For public companies, French regulation requires any investor contemplating a transaction on the share capital of a public company that may have a sub - stantial impact on the stock price to disclose the con - templated transaction promptly unless it can keep it confidential. In addition, the crossing of the 10%, 15%, 20% or 25% thresholds – either in shares or in voting rights in a public company – triggers the obliga - tion to notify the AMF and the target company of the investor’s intended objectives with regard to the listed company for the following six months. This notifica - tion is made public by the AMF. 4. Corporate Governance and Disclosure/Reporting 4.1 Corporate Governance Framework Rules on corporate governance are primarily codi - fied in the French Commercial Code ( Code de Com- merce ) and the French Monetary and Financial Code ( Code Monétaire et Financier ). Listed companies are also subject to the General Regulation of the AMF ( Règlement Général de l’AMF ) and must adhere to a corporate governance code, such as that of the French Association of Private Enterprises ( Association Française des Entreprises Privées , or AFEP) and the Movement of the Enterprises of France ( Mouvement
crosses the 30% threshold (assuming a listing on Euronext Paris) – either in shares or voting rights or a voluntary takeover bid. Under certain circumstances (notably, if the public company is distressed), the AMF may grant an exemption to the mandatory tender offer requirement. The AMF’s decision will be made on a case-by-case basis. The squeeze-out of the minority shareholders and the delisting is subject to the cross - ing of the 90% threshold both in shares and voting rights. The legal and tax frameworks significantly differ depending on how the transaction is structured. From a legal perspective, in the context of a share purchase, the purchaser steps into the seller’s position and acquires the company along with all its assets and liabilities. In a purchase of assets/business, however, certain assets and contracts are deemed part of the transferred business (which essentially involves clien - tele, other intangible assets, tangible assets, employ - ment contracts, insurance contracts and commercial leases). Any other assets or contracts must be specifi - cally identified to transfer, and all liabilities remain with the seller – except certain liabilities subject to specific regulation (eg, employee-related, social contributions, or environmental) or if expressly provided otherwise in the transfer agreement. Share purchases and assets/ business purchases are also subject to different trans - fer tax rules. Transaction structures for minority investments are partly similar, given that they can be mainly structured through any of the following: • a purchase of shares representing a minority equity stake in the target company; • a contribution of assets/shares in exchange for shares issued by the target company representing a minority equity stake; • the issuance by the target company of financial instruments convertible into a minority equity stake; and • the set-up of a joint venture. 3.2 Regulation of Domestic M&A Transactions Aside from foreign investment regulations (please refer to 7. Foreign Investment/National Security ), merger control (please refer to 6. Antitrust/Competition ), and
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