Step‑by‑step Squeeze‑out Procedure in France: Compulsory Buy‑out of Minority Shareholders

The squeeze‑out procedure in France allows a majority shareholder that holds at least 90 % of a listed company’s capital and voting rights to compulsorily acquire the remaining shares from minority holders, typically at the conclusion of a public takeover offer. Governed principally by Article L. 433‑4 of the Code monétaire et financier (CMF) and supervised by the Autorité des marchés financiers (AMF), the mechanism protects acquirers seeking full ownership while affording minorities a fair exit price validated by an independent appraisal. The process has gained fresh relevance for 2026 transactions following updated AMF General Regulation guidance on compliance timing, valuation reporting and delisting mechanics.

This guide sets out the eligibility thresholds, the step‑by‑step timeline, every document the AMF expects, the typical costs involved, and the practical pitfalls that derail even experienced deal teams.

Overview of the Squeeze‑Out Process and Who It Applies To

What Is a Squeeze‑Out?

A squeeze‑out (retrait obligatoire) is the compulsory acquisition of shares still held by minority shareholders after a public takeover offer. It is the mirror image of the sell‑out right (droit de retrait), under which minority holders can demand that the majority buyer purchase their shares on equivalent terms. Where a squeeze‑out is initiated by the bidder, remaining shareholders must transfer their shares; where a sell‑out is triggered by the minority, the bidder must purchase. Both mechanisms rest on the same statutory threshold and are designed to resolve the free‑rider problem that arises when a very small residual free float remains after an offer.

Legal Hooks and the Typical Deal Path

The statutory foundation for a squeeze‑out in France is Article L. 433‑4 CMF, supplemented by implementing provisions in the AMF General Regulation, notably Article 237‑9 and the related notes in Book III, Title I‑bis, Chapter 3, Section 10. In practice, the most common deal path begins with a voluntary or mandatory tender offer. Where the bidder ends the offer holding 90 % or more of the target’s capital and voting rights, it may activate the squeeze‑out within the statutory window. The AMF reviews the offer documentation and the independent appraiser’s report, issues a compliance statement (décision de conformité), and, once the squeeze‑out is implemented, approves delisting.

A squeeze‑out may follow either a voluntary offer or a mandatory offer triggered by crossing a statutory threshold (typically 30 % of capital or voting rights).

Eligibility and Prerequisites for the Squeeze‑Out Procedure in France

Before a bidder can activate the compulsory acquisition, two principal conditions must be satisfied under Article L.433‑4 CMF:

• 90 % threshold. The bidder, alone or acting in concert, must hold at least 90 % of the capital and 90 % of the voting rights of the target company.
• Prior public offer. A squeeze‑out can only follow a public offer (voluntary or mandatory) that has been declared compliant by the AMF. The bidder cannot bypass the offer process and proceed directly to compulsory acquisition.

Who Counts as “In Concert”?, Statutory Aggregation

Holdings are aggregated under Article L.233‑10 of the Code de commerce, which defines persons acting in concert as those who have concluded an agreement, whether formal or informal, to acquire, exercise voting rights, or pursue a common policy with respect to the target. In practice, the AMF examines shareholder agreements, family arrangements, joint‑venture accords, and any evidence of co‑ordinated market purchases. Advisers should document the concert analysis carefully: if the AMF disagrees with the aggregation, the 90 % threshold may not be met and the squeeze‑out will fail at the compliance stage.

When a Squeeze‑Out Is Not Available

The procedure is unavailable in several situations. If the bidder holds 90 % of capital but less than 90 % of voting rights (a common scenario where double‑voting shares exist), the threshold is not met. Cross‑listed companies may present jurisdictional complications where foreign regulators impose additional minority protections that conflict with the squeeze‑out timeline. Additionally, if the offer document did not expressly reserve the right to effect a squeeze‑out, the AMF may refuse to process the request, making the reservation clause critical drafting.

Step‑by‑Step Compulsory Acquisition Procedure

The takeover squeeze‑out process runs through six principal phases. The table below summarises each step, identifies who performs it, and provides the typical duration. The numbered sub‑sections that follow supply the operational detail.

Step 1, Confirm Threshold and Aggregation

The bidder’s legal team extracts a certified copy of the shareholder register from the transfer agent or central securities depositary (in most cases, Euroclear France). Counsel then conducts the concert‑party analysis under Article L.233‑10 of the Code de commerce, mapping every shareholder agreement, family relationship and co‑ordinated acquisition to determine the aggregate holding. A board resolution (or equivalent corporate authorisation) formally records the decision to proceed with the offer and to reserve the right to effect a squeeze‑out. This internal governance step, often overlooked, is essential: the AMF expects evidence that the bidder’s authorising body has approved the mechanism and the proposed offer price.

Step 2, Prepare and File Takeover / Squeeze‑Out Documentation with the AMF

The bidder, working with lead counsel and a presenting bank, prepares the offer document (note d’information). Under AMF Article 237‑9, the document must include a statement that the bidder reserves the right to implement a squeeze‑out if it holds 90 % or more at the close of the offer. The offer document is accompanied by the independent appraiser’s report (the fairness opinion), which sets out the valuation methodology, comparable transactions, and the control premium rationale. This bundle is filed with the AMF, which opens its review, typically lasting up to 20 trading days. The AMF may issue requests for supplementary information, which pause the review clock.

Industry observers expect AMF review windows to run closer to the maximum in cross‑border or contested transactions during 2026.

Step 3, Offer Acceptance Period and Post‑Offer Ownership Calculation

Once the AMF publishes its compliance statement, the offer opens for acceptance. The acceptance period generally runs for 15 to 25 trading days. During this window, minority shareholders tender their shares through their custodian banks or directly with Euroclear France. At the close of the acceptance period, the transfer agent compiles the acceptance tally and the bidder publishes a post‑offer press release disclosing the final holding. If the bidder, alone or in concert, holds at least 90 % of capital and voting rights, the squeeze‑out pathway is confirmed.

Step 4, Activate the Squeeze‑Out

Activation is the critical operational step in the squeeze‑out procedure in France. The bidder must serve written notice on every remaining minority shareholder by registered letter with acknowledgment of receipt (lettre recommandée avec accusé de réception). This notice must be served within three months of the last day on which the offer could be accepted, as prescribed by Article L. 433‑4 CMF. Missing this deadline extinguishes the right to effect the squeeze‑out on the basis of that offer. Simultaneously, the bidder arranges for the offer price to be deposited with the paying agent or held in escrow, ensuring that funds are immediately available to compensate non‑tendering shareholders.

The bidder then files a delisting application with the AMF, which processes the request once it is satisfied that the squeeze‑out has been properly implemented and all holders have been paid or funds have been consigned.

Step 5, Minority Remedies, Sell‑Out Election and Dispute Resolution

Minority shareholders who did not tender during the offer may exercise their sell‑out right on equivalent terms, demanding that the bidder purchase their shares at the offer price. If minority holders dispute the fairness of the price, they may apply to the courts for the appointment of an independent valuation expert under Article 1843‑4 of the Code civil. Court‑ordered appraisal proceedings can take months to years, but they do not delay the transfer of shares or the delisting, the price adjustment, if any, is resolved separately. In practice, early settlement negotiations between the bidder and dissenting minorities frequently resolve pricing disputes before litigation becomes necessary.

Required Documents and Information for a Squeeze‑Out

Every squeeze‑out filing requires a co‑ordinated package of documents from the bidder, the target, and third‑party service providers. The table below provides a checklist with issuer, format and timing notes. Counsel should treat this as a minimum: the AMF may request additional materials during its review.

The offer document should include model language along the following lines: “The Offeror reserves the right, in accordance with Article L.433‑4 of the Code monétaire et financier and Articles 237‑1 et seq. of the AMF General Regulation, to request implementation of a squeeze‑out procedure if, at the close of the Offer, the Offeror holds, alone or in concert, at least 90 % of the share capital and voting rights of the Target.” This clause is essential, omitting it may prevent the AMF from processing the squeeze‑out request.

Timeline and Key Deadlines for the Squeeze‑Out Procedure in France

Timing is one of the highest‑risk elements of a squeeze‑out. Missing a statutory deadline can extinguish the right entirely. The consolidated timeline below applies to a standard voluntary offer. Mandatory offers follow a similar structure but may have longer AMF review periods.

Worked example: Suppose a voluntary offer acceptance period closes on 15 November 2026. The bidder must serve squeeze‑out notices on remaining holders no later than 15 February 2027. Advisers should plan to serve notices well before the deadline, ideally within four to six weeks of the offer closing, to allow time for postal delays, returned mail and any corrective re‑service.

Costs, Fees and Tax Considerations

A squeeze‑out involves direct regulatory costs, professional advisory fees and potential tax liabilities. The table below provides indicative ranges. All monetary figures are market estimates and should be confirmed with the relevant service provider or the AMF’s published fee schedule before commitment.

Tax treatment for selling minority shareholders depends on their residence and the nature of the shares. French‑resident individual sellers are generally subject to the prélèvement forfaitaire unique (flat tax) on capital gains. Non‑resident sellers should check whether a double‑taxation treaty reduces or eliminates French withholding. Advisers on both sides should co‑ordinate on withholding mechanics before the payment date to avoid post‑completion disputes.

What Changes in 2026: AMF and Regulatory Updates

The 2025–2026 cycle of amendments to the AMF General Regulation introduces several operational adjustments that directly affect the squeeze‑out procedure in France. While the core 90 % threshold and three‑month activation window under Article L.433‑4 CMF remain unchanged, the AMF’s updated guidance in Book III, Title I‑bis, Chapter 3, Section 10 of the General Regulation reinforces expectations around compliance timing, valuation evidence and delisting mechanics.

The likely practical effect of these updates is threefold. First, the AMF is expected to apply more rigorous scrutiny to independent appraiser reports, particularly on methodology disclosure and the robustness of comparable‑transaction data. Bidders should prepare for supplementary information requests during the compliance review, which may extend the 20‑trading‑day review window. Second, delisting mechanics have been clarified: the AMF now requires explicit confirmation that funds have been consigned or paid to all non‑tendering holders before it will approve delisting. Third, early indications suggest that cross‑border offers, where the target has shareholders in multiple EU jurisdictions, may face longer review periods as the AMF co‑ordinates with peer regulators.

Acquirers planning a squeeze‑out during 2026 should engage the AMF informally at an early stage to confirm current procedural expectations and anticipate any deal‑specific requirements. Updated AMF guidance notes are published on the AMF’s website and should be monitored regularly.

Common Pitfalls and How to Avoid Them

• Ownership mis‑calculation. Failing to account for treasury shares, convertible instruments or share‑class differences can lead to an inaccurate 90 % computation. Always request a fully diluted cap table from the transfer agent.
• Incomplete concert‑party aggregation. Overlooking informal agreements or family relationships means the AMF may disagree with the threshold analysis. Map all relationships early and document them with counsel.
• Under‑resourced valuation documentation. Submitting a fairness opinion with insufficient methodology disclosure invites AMF supplementary requests and delays. Ensure the appraiser provides a fully reasoned report with at least three valuation methods.
• Omitting the squeeze‑out reservation clause. If the offer document does not expressly reserve the right to effect a squeeze‑out, the AMF may refuse to process the request. This clause must appear in every offer document where a squeeze‑out is contemplated.
• Late service of notices. The three‑month activation window under Article L.433‑4 CMF is a hard deadline. Serve notices by registered mail immediately after the post‑offer ownership is confirmed, do not wait until the final weeks.
• Improper service method. Notices must be sent by lettre recommandée avec accusé de réception. Ordinary mail, email or courier without proof of receipt will not satisfy statutory requirements.
• Tax withholding errors. Failing to withhold or report correctly on payments to non‑resident sellers creates post‑completion liabilities for the bidder. Confirm treaty entitlements and withholding procedures before payment.
• Works‑council consultation failures. Where French labour law requires information and consultation of the works council (comité social et économique), launching the offer before the consultation is complete can trigger injunctive relief.
• Cross‑listing complications. If the target is also listed on a non‑French exchange, additional regulatory clearances or parallel procedures may be required. Co‑ordinate with local counsel in each listing jurisdiction.
• Inadequate payment mechanics. If the paying agent cannot demonstrate immediately available funds, the AMF may delay the delisting approval. Arrange escrow or bank confirmation letters well in advance of the squeeze‑out activation date.

Sources

1. Légifrance, Article L.433‑4, Code monétaire et financier (CMF)
2. AMF, General Regulation, Article 237‑9 and Related Notes
3. AMF, General Regulation Notes, Book III, Title I‑bis, Chapter 3, Section 10
4. Légifrance / Journal Officiel, Legislative Texts Repository
5. AMF, Public Decisions and Press Releases
6. CSSF, Squeeze‑Out and Sell‑Out Framework (Luxembourg)