Scaling Through M&A in the U.S.

For French companies with an established presence in the US, external growth strategies offer efficient paths to expand market share. Unlike organic growth, these approaches enable rapid access to new customers, technologies, and distribution networks.

Partnerships: A Flexible Path to Expansion

Partnerships, structured as joint ventures (JVs), provide French companies a lower- commitment alternative to full ownership, ideal for testing markets or collaborating on specific projects. They offer several advantages over M&A: lower investment and operational risk by sharing costs and resources, possible exit through predefined terms, access to local expertise, such as a US partner’s market knowledge and networks, and reduced regulatory scrutiny by the authorities. Partnerships can take two main forms: equity JVs or contractual JVs. Equity JVs involve a U.S. entity with shared ownership, allowing for joint financing and operations. They raise a number of issues, including governance and decision- making, accounting consolidation, capital contributions and financing, deadlock resolutions, complex exit mechanisms like buy-sell options, and ownership of assets, in particular intellectual property, upon unwinding of the JV. Contractual JVs, which do not involve a legal entity, are simpler, less committal, more flexible but not without pitfalls. In particular, if profits are shared, the contractual JV could be deemed a de facto partnership for US tax purposes, possibly leading the IRS to reallocate profits/losses between parties. There is also the risk of liability of a party for the acts of the other, as US courts may hold parties jointly responsible as members of a “de facto” JV.

This blog post is based on an article from the February 2026 issue of the French-American Chamber of Commerce, Texas, business magazine.