Private equity (transactions)—France—Q&A guide

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Private equity (transactions)—France—Q&A guide
  • 1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?
  • 2. What are the implications of corporate governance rules for private equity transactions? Are there any advantages to going private in leveraged buyout or similar transactions? What are the effects of corporate governance rules on companies that, following a private equity transaction, remain or later become public companies?
  • 3. What are some of the issues facing boards of directors of public companies considering entering into a going-private or other private equity transaction? What procedural safeguards, if any, may boards of directors of public companies use when considering such a transaction? What is the role of a special committee in such a transaction where senior management, members of the board or significant shareholders are participating or have an interest in the transaction?
  • 4. Are there heightened disclosure issues in connection with going-private transactions or other private equity transactions?
  • 5. What are the timing considerations for negotiating and completing a going-private or other private equity transaction?
  • 6. What rights do shareholders of a target have to dissent or object to a going-private transaction? How do acquirers address the risks associated with shareholder dissent?
  • 7. What notable purchase agreement provisions are specific to private equity transactions?
  • 8. How can management of the target company participate in a going-private transaction? What are the principal executive compensation issues? Are there timing considerations for when a private equity acquirer should discuss management participation following the completion of a going-private transaction?
  • 9. What are some of the basic tax issues involved in private equity transactions? Give details regarding the tax status of a target, deductibility of interest based on the form of financing and tax issues related to executive compensation. Can share acquisitions be classified as asset acquisitions for tax purposes?
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Private equity (transactions)—France—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to private equity (transactions) in France published as part of the Lexology Getting the Deal Through series by Law Business Research (published: December 2020).

Authors: White & Case LLP—Saam Golshani; Alexis Hojabr; Estelle Philippi ; Franck De Vita; Samir Berlat; Alexandre Balat

1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?

France has historically been Europe's second-largest private equity market after the UK. Private equity transactions in France typically include private equity buyouts, management buyouts and tender offers. Despite several primary equity buyouts in past years, France is a very mature and sophisticated private equity market where a large part of the transactions are secondary or tertiary buyouts based on very competitive EBITDA multiples. According to France Invest (a French investment and growth association), approximately 300 French private equity players raised €16.5 billion in 2017, compared with €14.7 billion in 2016 (and €5 billion in 2012), of which nearly two-thirds (63 per cent) came from French investors. European and French public institutions, such as the European Investment Fund and Bpifrance (a French public investment bank), are investing in French private equity funds on a regular basis, and institutional corporations are also investing in French funds.

Traditional structures, including Luxembourg or Netherlands holding vehicles,

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