The merger auditor’s role
When is it required?
For mergers and demergers between companies, and in some partial transfers of assets. Some operations, such as certain mergers within a group, follow simplified rules.
How is the auditor appointed?
By the president of the competent court (tribunal des activités économiques, TAE, formerly the commercial court, in Paris and where it applies; commercial court elsewhere), at the request of the companies involved.
The reports
The auditor reports on the relevance of the exchange ratio and, where required, on the value of the contributions.
Independence
The merger auditor must be independent of the companies involved, which is checked before accepting.
The approach
- First meeting Operation, legal timetable, documents available.
- Engagement letter Scope, timetable and fees, after independence checks.
- Work Review of the valuation methods and the exchange ratio.
- Reports Issued in time for the shareholders’ meetings.
Frequently asked questions
Does every merger need a merger auditor?
No. Some operations, such as certain mergers between a parent and a wholly owned subsidiary, follow simplified rules. We check your case.
What is the exchange ratio?
The number of shares of the absorbing company given in exchange for shares of the absorbed company. It must reflect the relative values of the companies.
Can the merger auditor be the statutory auditor of one of the companies?
Independence rules apply: the situation is checked before accepting any engagement.
How much time should we allow for a merger audit in France?
It depends on the legal timetable of the operation and on how quickly information is available. Contact us as soon as the operation is being considered.
Can the merger auditor’s report be explained in English to the group?
Yes. The report is issued in French, as required, and the work and conclusions can be presented in English to the group’s finance and legal teams.