LBO & Management Packages In France: Are Recent Developments In The Practice Driven By Tax Considerations?

June 29, 2016

The management packages offered to managers in LBOs can sometimes be differentiating factors for financial sponsors enabling them to win a competitive process for the acquisition of a target company. Because the manager plays the role of both an investor and an employee, the French tax authorities try to tax the management package as a bonus rather than as a capital gain. Due to this uncertainty, some key elements of the management package must be carefully analyzed when a management package is offered to managers.

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