FRANCE Law and Practice Contributed by: Karl Hepp de Sevelinges, Nicolas Martin, Cyril Deniaud and Benjamin Cohu, Jeantet
These contrasting trends underscore a com - plex dynamic: while sectors like AI and bio - tech continue to attract substantial investment, broader political and economic uncertainties cast a shadow over the market’s attractiveness. Experts expect an upturn in M&A activity in France during the second half of 2025. 1.2 Key Trends Longer and More Complex M&A Processes in a Cautious Market Over the past 12 months, the French M&A mar - ket has been marked by a more cautious and risk-sensitive approach from buyers (as this was already the case in 2023). This caution stems from a combination of rising financing costs, persistent inflation and geopolitical instabil - ity, leading to longer and more complex deal processes and permitting to acquirers to have greater leverage in negotiating the terms of the contractual documentation. Key trends shaping this environment include (i) more buyer-friendly due diligence processes (which may result in longer transaction time - lines), (ii) inclusion of price structure mechanism (eg, earn-outs, deferred payments provisions, etc, linking parts of the purchase price to future performance of the target) and (iii) stronger legal protections mechanism (extended cata - logue of representations and warranties with an increased tendency to rely on warranty and indemnity (W&I) insurance policies, inclusion of material adverse change (MAC) provisions and conditions precedent) in the contractual docu - mentation. Divestments and Strategic Refocusing In response to economic pressures, many French corporates have focused on core busi - nesses and high-growth activities, leading to a
wave of divestments and restructuring. Promi - nent examples include the following. Sanofi’s sale of 50% of Opella In October 2024, Sanofi divested half of its con - sumer healthcare subsidiary Opella to US pri - vate equity fund Clayton, Dubilier & Rice (CD&R), marking a strategic move to streamline its opera - tions and focus on high-margin pharmaceuticals. Media sector divestitures The media industry saw a surge in M&A activity, with a remarkable 884% increase in deal vol - ume. Key transactions included the EUR1.55 billion sale of Altice Media (BFMTV and RMC) to CMA CGM and the acquisition of Paris Match by Bernard Arnault for EUR120 million. Increased Regulatory Scrutiny and French Foreign Investment Control (FIC) Regulatory oversight has intensified, adding complexity and longer timelines to French M&A transactions. Stricter FIC screening In line with previous years, the French Ministry of Economy and Finance continued to reinforce its foreign investment control screening mechanism in 2024 by extending the list of sensitive sec - tors that are subject to a screening (ie, extension to the acquisition of control of a French branch ( succursales ), activities relating to the extraction, processing and recycling of critical raw mate - rials) and enacting the permanent reduction of the investment threshold in a listed company for a non-EU investor from 25% to 10% of vot - ing rights. In 2024, out of 309 files filed with the French Ministry of Economy and Finance, 135 have been subject to an authorisation (among which 60 were authorised subject to compliance by the investor with certain undertakings).
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