The merger auditor is an independent expert, appointed for merger operations between companies to confirm the legality, transparency and fairness of the deal. The core duty is to protect the interests of the shareholders of the participating companies and to ensure the terms of the merger meet the legal requirements set out in articles L.236-10 and L.227-1 of the French Commercial Code (Code de commerce).
A merger auditor becomes necessary in several situations:
Mergers between companies: where one or more companies, such as sociétés anonymes (SA) or sociétés par actions simplifiées (SAS), merge to form a new company.
Demerger or absorption: in a simplified merger, or where companies want to demerge or be absorbed by an acquiring company, an auditor must be involved.
Share exchange ratios: where the exchange ratios of securities between the participating companies have to be set, the merger auditor confirms those terms are fair and equitable.
Role of the merger auditor: transparency and legality
Checking legal compliance: the auditor reviews the merger documentation, in line with the requirements of the competent commercial court (tribunal de commerce), to confirm it complies with the applicable law.
Analysing the financial and legal position: the auditor assesses the assets and liabilities of the participating companies and confirms the share exchange ratios are fair to shareholders. In some cases the same professional may also act as commissaire aux apports (contribution auditor) where the merger involves contributions in kind to the new company.
Writing an expert report: the auditor produces a detailed report setting out their conclusions on the legality and fairness of the operation, and submits it to the general meetings of the participating companies.
How the engagement runs: rigorous, independent expertise
The process is tightly structured and runs in stages:
Gathering and analysing information: the auditor collects and assesses all relevant documentation supplied by the participating companies, confirming that the requirements of article L.236-10 of the Code de commerce are met.
Valuing assets and liabilities: the auditor carries out a detailed valuation of the assets and liabilities of the companies involved, working alongside the commissaires aux comptes (statutory auditors) or court-appointed experts.
Producing and validating the report: once the analysis is complete, the auditor writes an expert report and presents it to the general meetings and, where required, to the president of the commercial court for approval.
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The merger auditor's report: the document that validates the operation
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The merger auditor's report sets out the expert's conclusions and recommendations at the end of the engagement. It contains:
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Detailed analysis: a thorough assessment of the legal and financial aspects of the merger, in line with articles L.236-10 and L.227-1 of the Code de commerce.
The merger auditor's engagement is essential to confirm that the companies involved meet their legal obligations and that the transaction serves the interests of all stakeholders. Approval by the shareholders' meetings and the tribunal de commerce (commercial court) is often the final step before completion, securing both the compliance and the transparency of the merger.
Clear conclusions: the auditor states precisely what they have concluded about the legality and fairness of the share exchange ratios, the financial terms and the allocation of rights between the parties.