M&A in France: Hamon Law has been streamlined and only applies to smaller transactions

The scope of the mandatory individual employee information introduced by Hamon Law is now limited to smaller transactions (involving less than 50 employees). It should be noted, however, that the requirement to inform and consult the works council (comité social et économique), still applies to companies having a works council and at least 50 employees. 

Since 2014, the so-called Hamon Law required that a transfer of at least 50% of a French company (or its business) could not be contemplated until the company’s employees had been individually informed of such a possibility and given an opportunity to submit an offer to buy out the company’s stake or business. This regime applied to all companies where an M&A transaction was about to be launched, but with certain nuances.  

With respect to companies having no works council or less than 50 employees, it created an entirely new obligation and potentially delay in the execution of a transaction.  With respect to companies having a works council and more than 50 employees, which were already subject to the information-consultation requirement, it simply created an additional information obligation toward the employees individually, but no additional delay.

A law enacted on 26 May 2026, which applies to transactions signed as from July 27, 2026, has narrowed the scope of the regime and shortened the applicable timeline.  

Key takeaways: 

• For smaller companies (fewer than 50 employees and more than 50 employees but without a works council):
  
  • Shorter timeline: the period during which employees may submit an offer has been reduced from two months to one month;
    
  • Waivers: as under the previous regime, the transaction may be completed before the expiry of the one-month period if all employees expressly confirm they do not intend to submit a purchase offer;
    
  • Reduced sanctions: failure to comply with the employee information requirement may now result in a fine of up to 0.5% of the transaction value, compared to 2% under the previous regime,

• For companies with a works council and more than 50 employees: 
  
  • No individual information requirement: employees no longer benefit from the right to be individually informed of a potential transaction and submit a purchase offer.  The impact of such change is limited since, before the change, employees’ right to be informed did not trigger the two-month timeline highlighted above. Once the works council had rendered its opinion, the transaction could be implemented;
    
  • Information-Consultation of the works council remains mandatory.