Your group owns two French subsidiaries outright and plans to merge them. With no outside investor involved, a streamlined process seems logical. Yet one indirectly held share class can change which approvals and reports are required. A shortcut intended to save time may instead create document rework, closing delays, or a dispute over the transaction’s validity.
A separate, partially simplified procedure may remain available where indirectly held preferred shares carry no voting rights. That route does not remove every approval requirement: the disappearing company must still approve the merger. Choosing the wrong procedure does not automatically invalidate the transaction, but the resulting omissions require a specific legal assessment.
What does a simplified merger do in France?
In a French merger by absorption, the disappearing company transfers its entire estate, including assets and liabilities, to the surviving company and is dissolved without liquidation. This follows from Article L. 236-3 of the French Commercial Code. French documents call these companies the société absorbée and société absorbante, respectively.
The simplified procedure changes the required corporate steps, not that underlying mechanism. Article L. 236-11 of the French Commercial Code provides exemptions from shareholder approval and specified reports where the ownership conditions are met.
It does not eliminate the merger plan, filing, and publication requirements under Article L. 236-6 of the French Commercial Code.
For U.S. deal teams, the relevant inquiry is eligibility under French corporate law. Do not assume that a U.S. short-form merger analysis or a tax-reorganization analysis answers that question. This article concerns domestic French merger procedures, not a merger between a French and a U.S. company.
The ANSA scenario: the group owns everything, but the parent does not
ANSA Legal Committee Communication No. 26-041 of June 3, 2026 examines this structure: parent A directly owns B’s ordinary shares and all of C. C owns B’s preferred shares. B is to absorb C.
According to ANSA, the simplified route is unavailable because A does not directly own all of B’s capital. Non-voting preferred shares still count as share capital.
ANSA is a French corporate-law association. Its committee’s opinion is professional guidance, not a court judgment or legislation. The issue is the availability of procedural exemptions, not whether the merger itself is prohibited.
Can the partially simplified procedure still work?
Article L. 236-12 of the French Commercial Code provides a separate procedure generally known as the régime semi-simplifié. Its ownership test refers to at least 90% of the shares or other equity securities carrying voting rights when the fully simplified procedure is unavailable.
If C’s preferred shares in B have no voting rights, A directly holds all the voting equity in both companies. ANSA accepts the partially simplified route in that situation. It reads the statutory wording excluding ownership of the entirety as reserving cases already covered by the fully simplified procedure.
If the preferred shares carry votes and reduce A’s direct holding below the required threshold, indirect ownership through C cannot make up the difference. The share-class terms therefore matter, not merely the ultimate ownership percentages on a group chart.
The ownership conditions must remain satisfied continuously from filing the merger plan with the commercial court registry through completion.
What actually changes between the procedures?
The ordinary approval framework comes from Article L. 236-9 of the French Commercial Code. The following comparison summarizes the main differences; company-specific governance requirements and the complete transaction must still be checked.
| Procedure | Shareholder approval | Reports |
|---|---|---|
| Simplified | Statutory exemption for the participating companies, subject to applicable safeguards | Specified statutory reports are waived |
| Partially simplified | Exemption for the survivor; approval remains required for the disappearing company | Separate conditions apply, including a buyout offer to minority shareholders of the disappearing company where applicable |
| Ordinary | Approvals required under the applicable rules | Reports must be assessed; specific waivers may still be available |
For example, Article L. 236-10 of the French Commercial Code permits a unanimous shareholder waiver of the appointment of a merger expert, subject to statutory conditions. Requirements concerning contributions in kind and special benefits must still be assessed separately.
A French commissaire à la fusion is an independent expert who assesses matters including relative share values and the fairness of the exchange ratio. Losing the simplified procedure does not, by itself, settle every question about that expert’s appointment or the reports required.
Can using the wrong procedure invalidate the merger?
There is no automatic invalidity or dedicated flat fine merely because the transaction was incorrectly labeled “simplified” under the provisions discussed here. The legal consequences depend on which mandatory steps were omitted.
Article L. 236-2-1 of the French Commercial Code restricts merger nullity to invalidity of an approving shareholders’ resolution or failure to file the required declaration of conformity. Article L. 236-17 of the French Commercial Code provides for that declaration for participating French sociétés anonymes, or SAs.
If the relevant defect can be cured, the court hearing the nullity claim must allow time for correction. A merger-nullity action has a six-month limitation period running from the last required entry relating to the transaction in the French trade and companies register.
A missing approval or report therefore needs an individual legal assessment. It is not a sufficient basis for announcing that every noncompliant merger is automatically void. Operationally, however, the group may need new documents, additional professional work, a revised closing timetable, or litigation over validity.
What should a U.S. parent or finance team verify before closing?
Start with the legal ownership records of each merging entity. Identify every equity class, its direct holder, its voting rights, and any planned ownership or rights changes before completion. A consolidated organization chart is useful, but it is not the full eligibility file.
Next, have the French legal team identify the approvals, reports, filings, and any waivers that remain necessary under the selected procedure. Treat tax treatment and other transaction-specific consents as separate workstreams rather than assuming that “simplified” resolves them.
This is where early legal involvement protects the transaction budget. The objective is not to add paperwork. It is to ensure that the timetable reflects exemptions the group can actually use, rather than savings that disappear shortly before closing.
Does ultimate 100% ownership qualify a sister-company merger for simplification?
Not necessarily. ANSA requires direct ownership of all the capital of both merging companies by the same parent for the fully simplified sister-company route.
Do non-voting preferred shares affect eligibility?
Yes. They remain capital for the fully simplified test, even though their lack of votes may help make the partially simplified route available.
Does the partially simplified procedure remove both shareholder approvals?
No. It removes the ordinary approval requirement for the surviving company, not for the disappearing company.
Is ANSA’s conclusion binding case law?
No. It is an interpretation by a professional legal committee, not a ruling by the French Supreme Court.
Is a procedurally defective merger automatically void?
No. French law limits the grounds for merger nullity and requires an opportunity to cure when the defect is capable of correction.
Does this establish tax-free treatment in France or the United States?
No. This article addresses French corporate formalities. It does not determine the tax treatment of the reorganization in either jurisdiction.
Conclusion
An internal merger should be designed around the rights held directly in each company, not just ultimate group control. Confirm the available exemptions before fixing the closing timetable, and preserve the evidence that the conditions remain satisfied through completion.