FRANCE Law and Practice Contributed by: Karl Hepp de Sevelinges, Nicolas Martin, Cyril Deniaud and Benjamin Cohu, Jeantet
9.4 Directors’ Duties Despite the reversal of the neutrality principle ( principe de neutralité ) brought by the Florange Law in 2014, the board’s freedom to implement defence measures during a tender offer is lim - ited. Company’s Interest French law requires that any defensive measures taken by the board must align with the compa - ny’s corporate interest, balancing the preserva - tion of its strategic vision and shareholder value. Directors cannot adopt measures solely aimed at entrenching their own positions or blocking a takeover without valid business justification. Directors are liable if they take certain measures that are contrary to the company’s corporate interest, or even if they remain inactive insofar as it is their duty rather than their ability to defend the company’s interests. Principles of French Takeover Law The Veolia–Suez case (2020–2021) was an opportunity for the AMF to point out that direc - tors implementing defensive measures during an offer must also respect the free interplay between offers and counter-offers ( libre jeu des offres et de leurs surenchères ), the equal treat - ment of shareholders, market integrity and fair - ness in transactions. Ultimately, French law seeks to balance board autonomy with shareholder protection, ensuring that defensive measures serve the company’s long-term interests rather than short-term mana - gerial self-preservation. 9.5 Directors’ Ability to “Just Say No” Since the Florange Law of 2014 and the transfer of responsibility for implementing defence meas - ures to the members of the board, the directors can have their own opinion on the admissibil -
ity of the offer in the interests of the stakehold - ers involved. This means that the directors can “just say no” and implement defensive measures which will repel the bidder as long as the defen - sive measure respects the company’s interest and does not undermine the competence of the shareholders’ meeting.
10. Litigation 10.1 Frequency of Litigation
Litigation in M&A transactions may occur at sev - eral stages of the deal (see 10.2 Stage of Deal ) but remains relatively uncommon in France. French corporate law’s emphasis on shareholder protection, combined with the AMF’s regulatory oversight, generally help prevent major conflicts. In 2024, there was a noticeable uptick in dis - putes related to ESG due diligence and regulato - ry compliance. Buyers are increasingly scrutinis - ing environmental and social practices, leading to claims of misrepresentation when sustainabil - ity metrics or governance practices fail to align with disclosed information. The events of early 2025 are likely to call ESG issues into question, however, as the Senate is considering a bill to remove social and environmental reporting con - straints from the CRSD to encourage corporate competitiveness. The AMF plays a preventive role by ensuring transparency and fairness in public offers. It frequently intervenes when there are allegations of misleading disclosures, breaches of fiduci - ary duties, or violations of market rules. Courts, meanwhile, enforce contractual obligations and adjudicate disputes over shareholder rights, price adjustments and post-closing obligations.
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