FRANCE Law and Practice Contributed by: Karl Hepp de Sevelinges, Nicolas Martin, Cyril Deniaud and Benjamin Cohu, Jeantet
8.4 Independent Outside Advice In France, it is common practice for a board of directors to seek independent external legal, financial and strategic advice in the context of M&A transactions in order to guide the board with respect to feasibility/strategic implications and the structure of the contemplated transac - tion. In specific situations, such as mergers or contri - butions in kind, French law requires the appoint - ment of independent auditors ( commissaires aux apports or commissaires à la fusion ) who will be in charge of issuing reports on the value of the assets or shares involved. This reliance on independent legal, financial and strategic advice helps mitigate litigation risks and supports the board in demonstrating that it has acted diligently and in the best interest of the company and its shareholders. 8.5 Conflicts of Interest In accordance with French law requirements, the execution of related-party agreements ( conven- tions réglementées ) (eg, any agreement entered into between the company and its direct or indirect shareholder holding more than 10% of the voting rights, or any director of such com - pany) other than those which are customary and entered into on an arm’s length basis, are subject to a specific approval regime from the shareholders. The aim of this process is to ensure that the agreement serves the company’s interests with - out influence from interested parties. In France, conflicts of interest in public M&A transactions and related-party deals are closely scrutinised. The corporate governance codes recommend directors in conflict situations to
disclose such conflict and to abstain from relat - ed discussions, with deviations requiring justi - fication.
9. Defensive Measures 9.1 Hostile Tender Offers
Hostile tender offers are permitted in France but remain relatively uncommon compared to other jurisdictions like the United States. The AMF oversees tender offers on listed com - panies. A hostile offer occurs when a bidder files an offer which is not recommended by the target’s board of directors. The AMF provides strict rules on disclosure, fairness and equal treatment of shareholders, ensuring that hostile tender offers adhere to the same transparency standards as friendly ones. The regulatory environment, corporate govern - ance culture and protective legal measures (see 9.2 Directors’ Use of Defensive Measures and 9.3 Common Defensive Measures ) contribute to the relative low number of hostile tender offers, though there have been notable exceptions. 9.2 Directors’ Use of Defensive Measures In France, directors have the ability to deploy defensive measures against hostile takeovers, subject to strict regulatory oversight and share - holder rights. Under the French Commercial Code and AMF regulations, directors must act in the company’s and its shareholders’ best interests. Defensive measures must align with this principle and cannot be purely obstructionist. Companies are increasingly considering ESG commitments and
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