COMPETITION • FRENCH LAW • MERGERS
Article L. 430-1 of the Commercial Code provides that a merger is carried out when two or more previously independent undertakings merge. This definition isolates, with reference to the legal medium used, the most common forms of concentration, those affecting the structure of the undertakings: merger by absorption, merger by creation of a new entity, merger/division and de facto merger.
The absorption of one subsidiary by another, both wholly-owned by the same group, does not constitute a concentration as long as it does not result in a change of control. Similarly, where pension funds have adopted a common commercial policy and formed a genuine economic unit prior to the notified merger by absorption, the merger takes the form of an intra-group restructuring and not a concentration.
On the other hand, the transaction by which three associations undertake to fully consolidate their activities by means of a merger leading to their dissolution and the universal transfer of their assets, activities and liabilities to the new entity, constitutes a concentration. This is also the case of the merging of the activities of previously independent undertakings into a single economic entity, endowed with a unique and sustainable economic management power, which is analogous to a de facto merger.
