FRANCE: AMF responds to queries on France takeovers and works councils

Tuesday August 24 2010

In reply to a query on the requirement to consults works councils of target companies for France takeovers, the AMF provided the following guidance:

I asked our Legal Affairs Division, and to be clear:

There are two ways for a company to deal with its work council: it can either inform or consult it. The regulation differs according one or the other case.

About takeover bids, the company has only to inform the work council.

Concerning the company subject of the takeover bid, the company must inform the work council as soon as he learns about the bid (More information: articles L2323-21 to L2323-24 + L2323-26 of the Labour Code).

Concerning the company offeror of the bid, there is a meeting of the work council in the two days following the publication of the takeover bid (More information: articles L2323-21, L2323-24 and L2323-26).

About other financial operations, principally mergers and acquisitions (and which imply that the two companies agree to the operation), the two companies consult beforehand the work council ((More information: articles L2323-19).

This consultation is supposed to enable the work council to express his view (even if his view/agreement about the operation is not binding).

Therefore, the work council must receive accurate information and get enough time to examine the project.