M&A lawyer Paris: structure the deal, audit the target, secure the closing.

From the letter of intent to closing, a standard deal takes three to six months for an established SME. Due diligence takes four to eight weeks depending on complexity. Negotiating the SPA and the GAP takes two to six weeks. Conditions precedent (administrative authorisations, the agreement of a key customer, bank financing) can lengthen the process. LBO or cross-border M&A transactions often exceed nine months.

The letter of intent sets the framework for negotiations between seller and buyer before due diligence: indicative price, perimeter of the sale, envisaged conditions precedent, timetable, exclusivity, penalties for breaking off talks. Its scope varies according to its clauses. The confidentiality, exclusivity and good-faith undertakings are legally binding; the price remains indicative until due diligence has confirmed the valuation. The letter of intent is a guidance document, not a preliminary contract.

Yes, almost always. The buyer incurs significant audit costs (lawyers, accountants, sector advisers) that justify exclusivity of sixty to one hundred and twenty days. If the seller abruptly breaks off talks during this period, it incurs liability under Article 1112 of the Civil Code and the case law on the breaking off of negotiations. Compensation covers the audit costs incurred, but not the loss of the benefits expected from the contract that was never concluded, nor the loss of a chance of obtaining them.

A condition precedent is a future event on which the effectiveness of the contract depends. The classic conditions in M&A: obtaining bank financing, approval from the supervisory authority (merger control, regulated sector), absence of a material adverse change (MAC clause), the agreement of a strategic customer or supplier. If a condition precedent fails, the party it benefits may walk away from the transaction without incurring liability.

Each party bears its own advisers' fees. The buyer pays for its buy-side due diligence (legal, tax, financial, employment), and the seller pays for its vendor due diligence when it commissions one. In practice, the vendor due diligence is then made available to the buyer, who relies on it to save time. Audit costs often represent 1 to 3% of the price for an SME.

Three methods coexist and are cross-checked: sector multiples applied to a normalised EBITDA (the dominant method), recent comparable transactions, and discounting of future cash flows (DCF). The valuation adopted depends on the sector, the maturity of the target, the quality of the financial data and the competitive context. The negotiated price also reflects the adjustment mechanism (net cash and debt, normalised working capital) and any earn-out.

An earn-out is an additional price payment indexed to the target's future performance (EBITDA, revenue, a sector indicator) over an observation period of one to three years. It is used to reconcile the seller's and the buyer's diverging expectations about the future trajectory. Drafting it requires particular care: a precisely defined indicator, governance during the earn-out period, floor and cap, an audit mechanism, penalties in case of manipulation.

Part of the price (often 5 to 15%) is paid to a third-party escrow agent (notary, bank, escrow lawyer) as security. The funds remain blocked for the duration of the GAP. They are released to the seller in stages if no claim notice has been served, or applied to compensate the buyer if a claim succeeds. The escrow makes the warranty concrete and spares the buyer from having to sue the seller for payment.

The statutory auditor (commissaire aux comptes) takes part in certain transactions: mergers between companies (merger auditor), partial asset contributions subject to the demerger regime, capital increases by capitalisation of reserves. It is not systematic for an ordinary share sale. By contrast, the financial audit of the target is carried out by an independent chartered accountant chosen by the buyer. The distinction between auditor and accountant remains essential in structuring choices.

Closing is a meeting (often by video conference) where the parties simultaneously perform all the commitments made in the SPA: signing of the share transfer orders, notification to the Trade and Companies Register (RCS), wiring of the price after verification of the conditions precedent, setting up of the escrow, resignations and appointments of officers, transfer of bank accounts, handover of keys and codes. A detailed pre-closing checklist avoids delays and blockages.

The buyer notifies the seller of the triggering event within the contractual time limits (often thirty to sixty days). The seller may accept, contest or ask to conduct the defence. If no agreement is reached, the escrow allows the buyer to be compensated without prior litigation. If the escrow is insufficient, the buyer brings the matter before the commercial court. A claim is often settled by a negotiated agreement.

A share deal transfers the shares of the company that holds the assets. The buyer takes over the entire company, with its disclosed and unknown liabilities. An asset deal transfers specifically identified assets (business, line of activity, real estate) without the historical liabilities. An asset deal limits the buyer's exposure but increases the seller's tax burden and complicates the transfer of contracts. The choice depends on the risk profile.

The SPA usually contains a clause giving jurisdiction to the Paris commercial court or an arbitration clause (ICC, AFA). Absent a clause, jurisdiction lies with the court of the defendant's registered office. For cross-border transactions, international arbitration remains the preferred route to neutralise geographic risk. The firm regularly appears before the Paris commercial court.

An action for nullity of a sale for a defect of consent (mistake, fraudulent misrepresentation, duress) is subject to a five-year limitation period running from the discovery of the defect (Article 2224 of the Civil Code). Time does not run while the buyer could not reasonably have discovered the concealment. The Commercial Chamber reiterates that fraudulent concealment always makes the induced mistake excusable, even if the buyer had management experience (Cass. com. 18 September 2024, No. 23-10.183).

Fees vary according to the size of the deal, the legal complexity, the urgency and the scope entrusted. For a standard SME, a fixed fee of €18,000 to €60,000 excl. VAT covers the letter of intent, due diligence, SPA, GAP and closing. For a mid-cap or a cross-border transaction, support is billed on time spent with a capped budget. The firm provides a detailed quote after reviewing the file.