French reform narrows employee notification obligations in business sales

At a glance

• France has reformed the Hamon Law, significantly limiting the circumstances in which employees must be informed of their right to make a takeover offer when a business is being sold.
• From 27 July 2026, the employee information requirement applies only to companies with fewer than 50 employees or to companies not having a works council (CSE with large attribution).
• Companies with more than 50 employees that have a properly established CSE are no longer required to provide individual notifications to employees before a qualifying sale.
• For businesses that remain within scope, the minimum employee notification period has been reduced from two months to one month, and the maximum penalty for non-compliance has been lowered from 2% to 0.5% of the sale price.
• Employers should ensure that a valid CSE is in place if relying on the exemption, as consultation obligations with the CSE continue to apply to relevant transactions.

France has introduced substantial changes to the employee information regime established under the Hamon Law, which was designed to give employees an opportunity to submit a takeover offer when their employer intends to sell the business or transfer a controlling shareholding. While employees may put forward a bid, they do not enjoy any priority right to acquire the business, and sellers remain free to choose their preferred purchaser.

Historically, the regime applied to companies considered as Small and Medium Companies, requiring employers to inform staff of their right to make an offer before completing certain transactions. This obligation added an additional procedural requirement to many mergers and acquisitions involving small and medium-sized businesses.

Act No 2026-403 of 26 May 2026 significantly reduces the scope of the regime. From 27 July 2026, the notification obligation will apply only to companies with fewer than 50 employees and to companies employing more than 50 that do not have a CSE. As a result, companies with more than 50 that have a duly established CSE are no longer required to individually notify employees of their right to submit a takeover offer.

The reform also introduces practical simplifications for businesses that remain subject to the rules. The minimum period between employee notification and completion of the transaction has been shortened from two months to one month, although a transaction may still proceed sooner if all employees formally waive their right to make an offer. In addition, the maximum civil penalty for failing to comply with the notification requirements has been reduced from 2% to 0.5% of the sale price.

Employers should nevertheless exercise caution before relying on the new exemption. Companies with more than 50 employees can only benefit where a validly constituted CSE with large attribution is in place. Businesses that have exceeded the 50-employee threshold but have not yet established a CSE, or whose CSE has not been renewed following the expiry of members' mandates, may still be subject to the employee notification obligation. Furthermore, the reforms do not remove the requirement for companies with at least 50 employees to inform and consult their CSE in relation to a proposed sale, a process that can still take between one and two months.