FRANCE Law and Practice Contributed by: Raphaële Courtier, Sébastien de Monès, Victor Camatta and Jessica Chartier, Bredin Prat
mid-cap segments remained relatively active year-to-year, with a focus on strategic sectors (such as financial, technology and health care sectors). Despite the ongoing Russia-Ukraine war, the French syndication market experienced a rebound in 2024 due notably to a decrease in the cost of financings (although interest rates remain quite high) and better spreads for invest- ment grade borrowers (syndication market grew by 45% year on year). The outstanding amount of market debt for French non-financial companies at the end of 2024 amounted to EUR705.2 billion, which represents a slight increase over the past 12 months. On the contrary, companies favoured bank loans, with an outstanding amount of over EUR1.376 billion in December 2024 (compared to EUR1.350 billion in December 2023), cor- responding to a 2% growth, “a rise identical to that of 2023. This growth was driven, in the previous year, by the dynamism of investment loans... which offset a decline in outstanding cash loans, yet slower in 2023” , as highlighted by the Banque de France. After a growing and sig- nificant increase in 2023 followed by relative sta- bility throughout 2024, the interest rate on bank loans dropped by 62 basis points by the end of 2024 compared to the end of 2023 (4.18% in December 2024 compared to 4.80% in Decem- ber 2023), while, as underlined by the Banque de France, the interest rate of debt securities slightly increased over the year (+14 basis points to 3.48%). As of January 2025, interest rates on new loans to non-financial companies continue to slightly decrease to 4.02% (after 4.18% in December 2024) while those on debt securities remained almost stable (3.48% compared to 3.49% in December 2024). The experts remain optimistic, and an upturn in the M&A market is expected in 2025 although the
global economic, financial and political situation remains uncertain. Deal makers and investors will have to adapt their strategy and are encour- aged to invest in strategic sectors. Supported by a strong banking sector in France, French banks continue to have a key position in the primary acquisition financing market although financing remains expensive. In addition, the dry powder amount (corresponding to amounts raised from investors and not yet invested) hit a new record in 2023 and was not invested as expected in 2024. One could expect that private equity transactions, especially in strategic sectors, will bloom again rapidly, especially given the require- ment for sponsors to invest such funds within a limited period of time. In 2024, French banks were well represented on the French financial advisers’ M&A market, with BNP Paribas (EUR32.8 billion), Société Géné- rale CIB (EUR18.7 billion), and Crédit Agricole CIB (EUR17.8 billion) arriving respectively fourth, ninth and tenth in the top ten. Lazard (EUR42.5 billion), Bank of America (EUR35.3 billion) and Goldman Sachs (EUR33.9 billion) are the top three on the top ten financial advisers’ list for 2024. 1.2 Corporates and LBOs After two consecutive golden years of leveraged buyout (LBO) transactions, between the sharp rise in interest rates and spreads, the mounting inflation and geopolitical crisis, the LBO market was hit hard in 2023 with a 66% decrease in transaction value and a 30% decrease in trans- action volume. The 2024 LBO market results are mixed and might suggest that 2024 was a year of transition. Indeed, on the one hand, activity remained stable in terms of volumes (141 LBO transactions during the first semester in 2024 against 143 over the same period in 2023) and on the other hand, the monetary easing initiated
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