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The first video looks at employment and competition issues that are broadly considered in the due diligence phase.
In labor law, this phase usually includes drawing up a due diligence report on the target company’s compliance with French employment regulations and providing a roadmap on how best to meet these obligations in the future. It also lists all the mandatory preliminary steps required for the transaction under French labor law.
In antitrust law, the phase can include a specific analysis of compliance with certain trade agreements (e.g. joint ventures, partnerships, distribution, etc.) with competition rules. We also analyze the merger control notifications required for the transaction, the so-called “multi-jurisdiction analysis”.
The second video describes the possible mandatory up-front steps that are required for the transaction.
In labor law there are two essential mandatory preliminary steps that can be triggered in a French M&A transaction. First, French labor law requires specific mandatory information to be provided and consultation of the works council (“CSE” in French) of a French company (with at least 50 employees) involved in an M&A transaction (purchase, sale and / or target company ). Second, some transactions (such as mergers, acquisitions, divestments, etc.) in relation to medium-sized French companies (as defined in the French and UE regulations) require that each employee of the target company be given specific information.
EU and French competition law require submission in advance if two conditions are met: first, the transaction is considered “concentration” and second, if it exceeds the applicable turnover thresholds. Even if the EU sales thresholds are not met, the transaction can potentially trigger multiple national thresholds within the EU. A Europe-wide coordinated approach is essential.
The third video deals with timing issues related to the mandatory steps before completing the transaction.
In labor law, any company with at least 50 employees involved in the M&A transaction must inform and consult its works council before the company’s legal representatives make a formal decision regarding the proposed M&A transaction. The CSE must deliver its opinion within one month, although this can be extended to two or three months in certain circumstances.
Under antitrust law, the responsibility for filing merger notifications lies with the buyer. They can only occur when the M&A transaction has progressed to the point where a proper antitrust review is possible. Evidence of the phase of the transaction can take various forms (e.g. agreement in principle, letter of intent, letter of offer, put option with an agreed form of share purchase agreement, etc.) Both the French competition authority and the EU Commission usually provide for an informal pre-notification phase, followed by a phase I review period of 25 business days.
The fourth video describes the process for the mandatory steps before closing.
In labor law, the main process is providing information and consulting the works council. There are three main steps in this process. The first thing to do is to establish a schedule that coordinates the various meetings that need to be held. Second, the information note must be drawn up, which must contain sufficient, clear and detailed information about the transaction. Finally, the opinion of the works council must be obtained. However, the opinion of the works council is non-binding and the employer can close the consultation at the end of the legal timeframe if the employer is of the opinion that he has provided all the necessary information.
In antitrust law, the procedure before the French competition authority and the EU Commission comprises two main steps. First, there is a quasi-systematic informal pre-registration phase. This phase is strictly confidential and its duration may vary depending on the information requested by the authorities. Once the authorities are satisfied with the information provided, the parties can formally submit, triggering the formal review period of 25 working days. During this formal phase, the authorities inform the market of the transaction and open a deadline for comments from third parties. Authorities must make their approval decision by the end of the formal review period.
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