COMPETITION • FRENCH LAW • MERGERS
Article L. 430-1 of the Commercial Code provides that a concentration arises where, inter alia, one or more persons (natural or legal, private or public) who already control at least one undertaking, or one or more undertakings, directly or indirectly acquire, whether by way of acquisition of an interest in the capital or purchase of assets, by contract or by any other means, control of the whole or parts of one or more other undertakings. The acquisition may be direct or indirect. It does not matter what legal form it takes. It covers the partial contribution of assets, the acquisition of an equity interest or management leases, and may even cover more diffuse forms of integration: del credere liability, mutual guarantee with respect to third parties, exclusive distribution contracts, integrated distribution, franchising, subcontracting, exchange of directors, grouping of undertakings, etc.
Control is defined broadly: it arises from rights, contracts or other means which, alone or in combination, confer the possibility of exercising decisive influence on the activity of an undertaking (Art. L. 430-1, II).
The possibility of exercising decisive influence arises in particular from:
– rights of ownership or enjoyment of all or part of the assets of an undertaking;
– rights or contracts which confer a decisive influence on the composition, deliberations or decisions of the organs of an undertaking.
This non-exhaustive definition gives the Competition Authority the possibility of dealing with all modern forms of financial ties or contractual integration. Decision-making practice deduces the existence of a power of decisive influence from a set of consistent indicators, such as veto rights, blocking minorities or shareholders’ agreements, the possibility of appointing managers within the target, the dispersion of other shareholders, the existence of significant links or the significant intervention as a lender to the undertaking.