All of French Company Law: ordinary law of companies and specific regime for different types of companies

Company Law (en cours)

Following the decision to implement a merger-acquisition operation, the first step in the process for the seller is to assemble their advisory team. This team is responsible for preparing a schedule of upcoming operations, evaluating the target, developing the business plan (business plan), searching for and selecting potential buyers, and preparing the appropriate documentation to inform them abo …

Preparations

Following the decision to implement a merger-acquisition operation, the first step in the process for the seller is to assemble their advisory team. This team is responsible for preparing a schedule of upcoming operations, evaluating the target, developing the business plan (business plan), searching for and selecting potential buyers, and preparing the appropriate documentation to inform them about the qualities of the target as well as the legal documentation. A deal maker is appointed among the advisors to oversee the fulfillment of their missions. Additionally, to maximize the chances of success of the operation, the seller prepares the target on all fronts (financial, accounting, tax, social, legal, etc.), which involves conducting a preliminary audit of the target before the start of negotiations, called Vendor Due Diligence (VDD). The VDD reports are included in the documentation made available to potential buyers to allow them to assess the value of the target.

When the seller opts for a private negotiation, they immediately enter into negotiations with the buyer proposed by their advisors. However, in the case of a private tender, the negotiation phase is preceded by the search for potential buyers by the seller's agent. This begins with the formalization of a long list of all potential buyers, which is synthesized into a short list, after a thorough review of the first. Then, the seller sends the selected potential buyers a teaser, that is, a summarized and anonymous presentation of the target, as well as the proposed transaction. Those interested in the target express their interest by entering into a confidentiality agreement with the seller, also known as a non-disclosure agreement (NDA), which aims to set out the specific confidentiality conditions under which the parties will exchange information during the negotiations . Indeed, the potential buyers must not disclose the information brought to their attention about the target. Moreover, except for the final buyer, the other potential buyers commit to destroying all received information at the end of unsuccessful negotiations. Furthermore, the exchange of information with competing potential buyers requires the seller to ensure compliance with competition law, to avoid the risk of any anticompetitive agreement .

Finally, interested potential buyers receive an information memorandum (Info Memo), which provides detailed information about the target (its activity, financial situation, composition, organization, operation, etc.). The sending of an Info Memo, which signifies the mutual interest of the seller and the buyer, even if there has not yet been a physical presentation, may entitle the intermediary to remuneration . The Info Memo is followed by the sending of a process letter, which outlines the process of the proposed transaction, including the transaction schedule, the deadline for submitting an offer, information on advisors, and information regarding the due diligence.

See CA Versailles, 19 March 2019, LawLex202300003671JBJ.

CA Paris, 16 October 2014, LawLex202300002003JBJ.

Company Law (en cours)

236. Preparations

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

236. Preparations

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise