How To Do a Cross-Border M&A in France: Merger Control, Foreign Direct Investments (FDI) Screening & Deal Structure Checklist

Understanding how to do a cross-border M&A transaction in France requires navigating a regulatory framework built around two distinct approval regimes: merger control and foreign direct investments (FDI) screening.

On the one hand, where the transaction constitutes a concentration (i.e. where it involves a lasting change of control within the meaning of Regulation No. 139/2004 and Articles L. 430-1 and L. 430-2 of the French Commercial Code), merger control may be carried out either by the European Commission or by the French Competition Authority, depending on the applicable thresholds.

On the other hand, FDI screening is conducted by the French Minister for the Economy when the investment concerns sensitive sectors.

Although these two mechanisms operate independently from one another, both may have a significant impact on the timing and implementation of the transaction.

Against this backdrop, the French Parliament adopted the “Economic Life Simplification Bill” (“Loi de simplification de la vie économique”, n°2026-403) on 14–15 April 2026, raising the French merger control notification thresholds for the first time in more than two decades. The new thresholds, which will enter into force on 1 September 2026, materially change the filing calculus for mid-market transactions, while France’s FDI screening regime continues to expand its sectoral reach, creating a parallel approval track that can add weeks or months to deal timelines.

This guide delivers the practical steps, worked threshold arithmetic, and structuring tactics that M&A counsel and corporate development teams need to move from letter of intent to closing with confidence.

Quick Checklist, Is This Deal Reportable?

Short answer: The first step when the transaction constitutes a concentration is to verify the applicable merger control thresholds. Next, even if the transaction does not constitute a merger, check whether the target’s sector triggers FDI screening. If the answer to either is “yes”, you have a mandatory filing obligation before closing.

Decision‑tree flowchart

• Step 1, EU jurisdiction check. Does the transaction meet the EU Merger Regulation turnover thresholds? If yes, the European Commission has exclusive jurisdiction and no French filing is needed (subject to narrow referral rules).
• Step 2, French merger control. Do the parties’ combined worldwide turnover and individual French turnover exceed the new thresholds adopted on 14–15 April 2026? If yes, notify the French Competition Authority before closing.
• Step 3, FDI screening. Is the acquirer a foreign investor? Does the target operate in a designated sensitive sector? If yes, obtain prior authorisation from the Minister for the Economy.
• Step 4, Dual track. If both merger control and FDI screening apply, plan parallel filings and align the longer timeline into the SPA’s conditions precedent.

Step 1: Does the concentration meet the European thresholds?

Short answer: If the concentration meets the European thresholds set out in Council Regulation (EC) No. 139/2004 (“EU Merger Regulation”), merger control falls in principle within the exclusive jurisdiction of the European Commission, subject to the referral mechanisms provided for in the EU Merger Regulation.

In fact, the EU Merger Regulation grants the European Commission exclusive competence where the concentration has a “Community dimension.” In practice, this means the Commission reviews the deal, not the French Competition Authority (“Autorité de la concurrence”), when the parties’ combined worldwide turnover exceeds €5 billion and at least two parties each achieve EU‑wide turnover of more than €250 million, unless each achieves more than two‑thirds of its EU‑wide turnover within a single Member State. A second alternative set of thresholds applies at lower levels (see table below).

When EU thresholds are met, no parallel French filing is required unless the Commission refers the case back to France under Article 9 of the EU Merger Regulation. Referrals remain uncommon but can occur when a deal predominantly affects French markets.

Step 2: Does the transaction meet the new French thresholds?

Short answer: In accordance with the Economic Life Simplification Bill, with effect from 1 September 2026, barring certain French overseas territories and a few remaining sector-specific exceptions, a concentration must be notified to the French Competition Authority when (a) the combined worldwide turnover of all parties exceeds €250 million and (b) at least two parties each achieve individual turnover in France exceeding €80 million.

• New thresholds at a glance 

The increase is significant. Market observers expect a measurable drop in French filing volumes in the medium term, particularly for mid‑market deals where the target’s French turnover amounted to between €50 million and €80 million.

• Worked examples 

• Case 1, French Competition Authority (merger control) filing required. A German industrial buyer acquires 100 % of a French automation company. The buyer group’s worldwide turnover is €900 million, including €150 million in France. The target’s French turnover is €95 million. Together, at least two parties each achieve more than €80 million of turnover in France. The combined worldwide turnover of €995 million (€900 million + €95 million) exceeds €250 million.

Result: a notification to the French Competition Authority is mandatory. 

• Case 2, No merger control filing required. A US private‑equity fund acquires a single French manufacturing plant from a diversified conglomerate. The plant’s standalone turnover attributable to France is €40 million. The fund’s existing French portfolio companies generate €35 million of French turnover. Neither party individually exceeds the €80 million French turnover limb.

Result: no French Competition Authority filing is required under the new thresholds, but the acquirer must still verify whether FDI screening applies given the manufacturing sector (see below Step 3).

2.3. Timeline for merger control review (EU and France) 

The vast majority of notified concentrations are cleared during Phase I under both regimes. Early and comprehensive pre‑notification engagement remains the single most effective way to accelerate the review process.

Step 3: FDI Screening France 2026

Short answer: Any foreign investor acquiring directly or indirectly control of a French entity or all or a part of a business line of such entity, operating in a designated sensitive sector must obtain prior authorisation from the French Minister for the Economy before closing the transaction. For non‑EU/EEA investors, crossing certain voting‑rights thresholds in such entities (typically 25 % and 10 % for listed companies) may also trigger a filing requirement.

3.1. The notion of “foreign investor”

The concept of “foreign investor” refers to (i) any natural person of foreign nationality or (ii) of French nationality who is not domiciled in France within the meaning of Article 4 B of the French General Tax Code, (iii) any entity governed by foreign law or any entity governed by French law that is controlled by one or more persons or (iv) by entities referred to the three previous points.

3.2. The notion of “investment”

Under Article R.151-2 of the French Monetary and Financial Code, an investment refers to the acquisition (i) of control over a French entity according to Article L.233-3 of the French Commercial Code, (ii) of all or part of a business line of a French entity, (iii) of more than 25% of the voting rights of a French entity or (iv) of more than 10% of the voting rights of a French listed company.

For EU/EEA investors, the French FDI regime mainly targets acquisitions of control and of sensitive business lines, whereas the 25% and 10% voting‑rights thresholds are primarily relevant for non‑EU/EEA investors.

3.3. Sectors of concern

France’s FDI screening regime covers a broad and expanding list of sectors deemed essential to national security, public order, or strategic interests. These include:

• Defence, weapons, dual‑use technologies, and ammunition
• Cybersecurity and critical digital infrastructure
• Energy (electricity, gas, hydrocarbons) and water supply
• Telecommunications and electronic communications
• Public health and the supply of medicinal products
• Certain research and development activities relating to artificial intelligence, semiconductor manufacturing and quantum technologies
• Food security (added in recent years)
• Media and press (certain thresholds)

The practical effect of these expansions is that a substantial portion of cross‑border M&A activity in France now intersects with FDI screening. Deal teams must assess sector coverage as early as the due‑diligence phase.

3.4. Who should the filing be submitted to and how?

FDI applications must be submitted to the French Ministry for the Economy (“Direction générale du Trésor”) through its dedicated online platform before closing. The filing is generally made in French, although certain supporting documents may be provided in English.

The Ministry reviews the application in coordination with other relevant government departments and may request additional information from the investor or the target during the review process.

3.5. Filing exemptions

Certain intra-group reorganisations are exempt from French FDI screening where the ultimate controlling investor remains unchanged. However, the exemption does not apply where the transaction affects commitments attached to a previous FDI authorisation or involves the transfer abroad of a sensitive activity.

3.6. Conditions and sanctions

Closing a transaction without the required FDI authorization may result in injunctions, daily penalty payments, administrative fines, and, in certain cases, criminal sanctions. The Minister may also require the parties to unwind the transaction or restore the previous situation. Investments completed without prior authorization may be declared void.

3.7. Procedural timeline

The review process comprises a Phase I review of up to 30 business days and, where further scrutiny is required, a Phase II review of up to 45 additional business days. The total statutory review period is therefore up to 75 business days, although the timeline may be suspended if additional information is requested.

At the end of the review, the Minister may clear the transaction, clear it subject to conditions, determine that it falls outside the regime, or prohibit it where identified risks cannot be adequately mitigated.

Step 4: Parallel filings, mergers vs FDI, and priority sequencing

Short answer: Where both merger control and FDI screening apply, deal teams must manage two parallel regulatory tracks that run on different clocks and serve different policy objectives. The table below highlights the key timing differences.

4.1. Practical Timelines

Early indications suggest that deal teams achieving the best outcomes coordinate both filings from the outset, embedding a unified conditions‑precedent clause in the SPA that references clearance from both the competent competition authority and the Ministry. This avoids a scenario where one clearance expires before the other is obtained.

4.2. Worked Examples and Calculator Notes

The following three mini cases illustrate how the merger control thresholds France 2026 operate in practice:

• Case 1, French Competition Authority (merger control) filing and FDI authorisation required. A Japanese semiconductor group (worldwide turnover: €4 billion, including €120 million in France) acquires a French cybersecurity firm (French turnover: €90 million). Both French turnover limbs exceed €80 million and the combined worldwide turnover (€4 billion + €90 million) exceeds €250 million. The target operates in a designated FDI sector.

Result: French Competition Authority notification and FDI authorisation both required.

• Case 2, Only FDI authorisation required. A Canadian pension fund acquires a 30 % stake in a French defence subcontractor (French turnover: €60 million). The fund has no existing French portfolio. The individual French turnover limb of €80 million is not met, so no French Competition Authority filing is needed, but the defence sector triggers FDI screening.

Result: FDI authorisation required; no merger‑control filing.

• Case 3, No merger control filing or FDI authorisation required. A UK private‑equity firm acquires a French luxury‑goods retailer (French turnover: €70 million). The buyer’s existing French portfolio turnover is €45 million. Neither party exceeds €80 million individually in France. Luxury goods are not a designated FDI sector.

Result: no French Competition Authority filing and no FDI authorisation required.

These examples underscore why precise turnover arithmetic, performed against the 2026 thresholds, is the essential first step in any cross‑border M&A in France.

Conclusion, Next Steps for Your Cross‑Border M&A in France

The April 2026 threshold increase resets the filing calculus for cross‑border M&A in France, but the compliance framework remains demanding. Deal teams should compute turnover against the new €250 million / €80 million thresholds, assess FDI sector exposure, and build realistic parallel‑filing timelines into every SPA. The earlier you engage with both the French Competition Authority and the Ministry for the Economy, the greater your control over the transaction timetable.

Finally, deal teams should remember that the choice of transaction structure may directly affect whether merger control and FDI filing obligations are triggered, with share acquisitions, asset deals, carve-outs, joint-ventures, and staged acquisitions potentially leading to different regulatory outcomes.

For a tailored threshold assessment or guidance on structuring your next French acquisition, find a cross‑border M&A lawyer in France through the Global Law Experts directory.

Need Legal Advice?

This article was produced by Global Law Experts. For specialist advice on this topic, contact Prof. Dr. Jochen Bauerreis at abci Avocats, a member of the Global Law Experts network.