Share Purchase Agreement French Law

In some cases, the transaction may be approved by public authorities or essential commercial contractors. The obligations of the parties with respect to these authorizations should be detailed in the share purchase agreement and the closing of the transaction (i.e. its conclusion) should be conditional on obtaining these authorizations. In particular, with regard to the acquisition or sale of shares in a company where there are several sellers, each must agree to sell for the buyer in order to acquire all the shares? If not, how can minority sellers who refuse to sell be crushed or dragged by a buyer? The amount of due diligence generally depends on the size of the proposed acquisition (i.e. the purchaser intends to acquire a minority interest or 100% of the share capital of the objective). Due diligence generally includes corporate documentation, business contracts, employment, taxation, IP, IT, regulation, litigation, environment, accounting and finance. Compliance issues are also increasingly becoming a central theme of due diligence, particularly under the new requirements imposed by the French Anti-Corruption Act 2016 (Sapin 2) Law. Typically, ancillary agreements are made to ensure that the buyer successfully takes over the business with the cooperation of the sellers. The nature of these ancillary agreements and the obligations to the seller depend on the activity of the company. Therefore, if a parent company sells a subsidiary that owns the intellectual property rights to products produced or distributed by another entity in the group, ancillary production or distribution agreements may be entered into to ensure that there is no disruption to the distribution chain or process during a certain transitional period. Although it is possible to submit to a foreign law (with the exception of certain specific assets such as real estate) a transaction involving a single objective or a wealthy French asset, this is very unusual, and most sales of French objectives and assets are governed by French law. In any event, French law would govern the legal transfer of ownership of the target`s shares or assets.

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