Company merger lawyer in Paris: restructuring without losing control.

A merger by absorption makes the absorbed company disappear by universal transfer of its assets and liabilities to a pre-existing company (the absorbing company). It is the most common structure for simplifying a group. A merger by formation of a new company brings together two or more pre-existing companies in a newly registered neutral vehicle, which receives all of their assets and liabilities. The choice depends on the objective (consolidation of assets, neutrality of the shareholding, tax considerations) and on the timetable that is workable.

Universal transfer of assets and liabilities (TUP) is the main legal effect of a merger by absorption or of the dissolution without liquidation of a company with a sole shareholder. The receiving company takes over, as a whole, all the assets and liabilities of the company that disappears: assets, liabilities, contracts, employees, security interests, pending proceedings. The transfer takes place by operation of law, without any need for an item-by-item transfer. It also applies to a demerger, with an allocation among several receiving companies. Article L. 236-3 of the French Commercial Code (Code de commerce) sets out the regime.

The exchange ratio rests on two conflicting valuations of the companies concerned at the reference date. It may combine several methods: multiples of listed comparables, discounted cash flows, revalued net assets. The merger auditor's report checks the consistency of the ratio adopted. A challenged ratio may give rise to an action for liability against the directors or an action for nullity of the merger, the latter being subject to the limitation period of Article L. 236-2-1 of the Commercial Code.

Non-bondholder creditors of each participating company whose claim predates the publicity given to the draft agreement may lodge an opposition within a statutory period running from the last publication. The court seised may reject the opposition, or order repayment or the provision of sufficient guarantees. Until a decision is given, the merger remains enforceable against a creditor who has received payment or a guarantee. The Court of Cassation (Cass. com., 7 October 2020, No. 19-14.755) confirmed the practical scope of this mechanism.

No. The merger auditor's report on the exchange ratio may be dispensed with by unanimous decision of the shareholders of the companies concerned (Article L. 236-10 of the Commercial Code). However, the report on the value of contributions in kind is still required where it is mandatory. For the simplified merger of a company 100% owned by the absorbing company, several steps are lightened, but formal traceability remains essential to preserve the legal certainty of the transaction.

Not automatically. Contracts concluded in consideration of the identity of the contracting party (franchise, exclusive concession, agency mandate, intellectual services, sensitive banking agreements) may require a new express consent from the counterparty on a merger. Without an express transferability clause or approval, the counterparty may refuse the transfer and obtain termination. A prior contract review and the collection of written consents before the merger agreement is signed avoid this structural risk.

Yes, automatically and by operation of law. Article L. 1224-1 of the French Labour Code (Code du travail) provides that all employment contracts in progress on the date of the change continue between the new employer and the staff of the business. The receiving company takes over seniority, contractual bonuses, accumulated days, employment tribunal claims and collective commitments. Prior information of the social and economic committee (CSE) of each company concerned is mandatory.

The favourable regime of Article 210 A of the French General Tax Code (Code général des impôts) allows capital gains on contributions and profits arising from the merger to be exempted from corporate income tax. It is subject to several written commitments in the merger agreement: taking over deferred provisions and the special reserve on the liabilities side, substitution for the recapture of deferred results, calculation of later capital gains on the earlier tax value, recapture over fifteen years for buildings and five years for other depreciable assets. Careless drafting loses the benefit of the regime.

A merger makes the absorbed company disappear and transfers all of its assets and liabilities. A partial transfer of assets transfers only a complete branch of activity to a third-party company, without dissolving the contributing company. The latter receives shares of the receiving company in return. A partial transfer is useful to isolate an activity in a dedicated subsidiary or to prepare a later sale. The legal regime comes close to that of a demerger where the partial transfer is deliberately placed under the demerger regime.

A simple intra-group merger (subsidiary absorbed by its 100% parent) is completed in two to three months between signing of the merger agreement and BODACC publication. A merger between two independent companies generally takes four to six months, allowing for the conflicting valuations, the merger auditor's report, the meetings and the clearing of oppositions. A complex demerger with several receiving companies often exceeds six months if several transactions have to be coordinated.

The simplified merger applies where a company absorbs a subsidiary in which it holds 100% of the shares, or where one company is absorbed by another that holds 100% of its shares. Several steps are lightened: no exchange of shares, no merger auditor's report, no meeting of the absorbed company. Formal traceability remains essential. The simplified regime is widely used for intra-group restructurings to reduce cost and timetable.

Yes. A demerger may be carried out for the benefit of existing companies (demerger in favour of pre-existing receiving companies). It may also be carried out for the benefit of a new company created for the occasion. The allocation of assets and liabilities among the beneficiaries is set out in the demerger agreement, with a special mention for items whose allocation is unclear. The firm systematically secures this allocation to avoid claims after the transaction.

The absorbing company succeeds the absorbed company in the proceedings, by the effect of universal transfer of assets and liabilities. The Court of Cassation (Cass. com., 18 September 2024, No. 23-13.453, published in the Bulletin) specifies that the other party must nonetheless direct its claims against the absorbing company, and no longer against the absorbed company that has disappeared. Procedural vigilance is therefore essential to avoid an inadmissibility objection after the merger.

For a simplified intra-group merger (100% subsidiary absorbed by its parent), fees are generally between €5,000 and €9,000 incl. VAT, timetable included. For a merger between two independent companies with a merger auditor's report and negotiation of the exchange ratio, the range rises to €12,000 - €25,000 incl. VAT. For a complex demerger or a structuring partial transfer of assets, the range exceeds €25,000 incl. VAT. The firm proposes an overall fixed fee after reviewing the file, with no surprise hourly billing.

Disputes between shareholders and those relating to the running of the company fall within the jurisdiction of the commercial court (tribunal de commerce) of the registered office, that is, the Paris economic activities court (tribunal des activités économiques, the name given on an experimental basis since 1 January 2025 to the Paris commercial court) for a company registered in the capital. The action for nullity of the merger is subject to the limitation period of Article L. 236-2-1 of the Commercial Code. Challenges relating to the exchange ratio or to the merger auditor's liability follow the ordinary rules. The firm regularly pleads before the Paris economic activities court.