The French mergers and acquisitions market has yet to differentiate between middle market and large company work to the same extent as the US and the UK. Large deals in the public company markets would in any event be considered mid-cap by UK standards.
In the crowded Paris market for legal services, there is, however, a growing view among French lawyers that buyers of legal services will distinguish between those firms that can handle cross-border deals and those that cannot.
French lawyers are particularly concerned that large multinationals and investment banks will soon start to pass over French law firms for deals, even if a deal is middle-market by Anglo-American standards and a purely French domestic deal, unless a firm is familiar with UK and US standard practices.
This means that more deals involving a French target are structured using a UK-style sale and purchase agreement and disclosure letter. The underlying content will remain under French law.
Robert Follie, head of M&A at Lovells in France, says: "The younger investment bankers expect a share purchase agreement to look a certain way.
"A local niche French firm may have a draft form which may not been seen as satisfactory for international banks.
"For example, when we acted for Barclays Bank on its recent disposal of the French business belonging to Woolwich, we produced a UK-style sale purchase agreement with the sales package, for use by French buyers. Credit Immobilier de France eventually bought the business.
"More and more investment banks are keen for their draft contracts to meet international criteria. We are moving away from the simplistic French law contract. This can typically be as short as six or seven pages, but contains numerous references to the Code Civil.
"The most practical way of alerting the clients - having them review their position and be happy - is putting everything into one contract rather than referring to the Code. Luckily, nothing in French law prevents us from picking up what is good from other jurisdictions."
Since Lovells' merger last year with Simeon in Paris, and its Dutch and German mergers, the firm has produced a standardised European format for a due diligence report that lawyers in each jurisdiction can then tailor to local requirements.
Follie says: "International clients expect a harmonisation rather than a standardisation of documentation. The format must remain familiar to them so that they are not distracted from the substance which may differ in each jurisdiction."
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