How to build statistics on business take-over ? Catherine RENNE, INSEE

Growing user needs Observation Stakes 30% of the enterprises are managed by someone who is more than 50 years old. Majority of business take-over concern SMEs which are less prepared than big enterprises Stakes Employment Development of french territory

Enterprises in France 51% 42% 40% 21% 39% 7% 0.2% [0] [1-9] [10-249] >250 Enterprises Employees

Enterprises : localization & activity 1 enterprise out of 5 is located in a rural district 1 enterprise out of 3 has a proximity activity : Retail trade Hôtels & restaurants Some services to households

User needs Comprehensive database on units : Questions : What is a business take-over? Does the BR contain all the necessary information? How to build the database linking all the units involved in the process? that are taken over which take over With information on: Localization Sector of activity Employment Survival

Business take-over ? Transfer of both ownership & decision making from a legal entity, which makes over its business, and an other one which takes it over. Within the family context Buy out by the employees Buy out by someone outside the enterprise (new /existing entrepreneur) Purchase the majority of shares in a firm Transfer by private agreement Transfer due to bankruptcy

Free of charge Not Free Of Charge No new record in the BR Free of charge Inheritance settlement Not « sole propr. » « sole propr. » Creation by take-over : in the BR Take over of the assets Creation by take-over in the BR purchased goodwill Not Free Of Charge Management of the business Can be identified in the BR (if declared) Absorption, splitt-off, mergers Can not be identified in the BR Taking control of a company

Conclusions of the first step BR information is a good starting point to estimate business take-over Additional information is needed to have a complete estimation of absorption, splitt-off, mergers BR is not the good source to estimate take-over by bying the shares. Acording to a study made by the chamber of commerce of Paris, this way of take-over is as important as the other ways of take-over.

Where to find missing information? Business Register Information related to the managers & the components of the capital Annual Business Survey Information related to enterprise restructuring Survey on financial links Information of owner of the shares of a company that belongs to an enterprises group

Use of BR information Declared information Information managed by BR By the unit which takes over : origin of means of production, ident. number of the predecessor By the unit which is taken over : destination of means of production in case of cessation, but no information on the unit which takes over Information managed by BR Search for a possible predecessor:in case of creation of a local unit with more than 5 empl.

% Change 1998-2001 Real deaths Take-over 1998 170 885 53 703 2001 164 627 50 453 % 98/01 -3.7% -6.1% Business take-over By an enterp. New Existing unknown 1998 39 915 9 486 4 302 2001 38 050 9 621 2 782 Évol. 98/01 -4.7% +1.4% -35.3%

Real deaths : -3.7% 0 employee 1-9 employees 10-249 employees 1998 107 845 59 082 3 942 16 2001 106 002 54 549 4 054 22 % 98/01 -1.7% -7.7% +2.8% +37.5% Average size 1-9 employees 10-249 employees > 250 employees 2.2 23.2 551.4 2.2 23.5 421.0

Business take-over : -6.1% 0 employee 1-9 employees 10-249 employees > 250 employees 1998 16 617 33 111 3 847 128 2001 13 447 32 641 4 227 138 % 98/01 -19.1% -1.4% +9.9% +7.8% Average size 1 à 9 salariés 10 à 249 salariés 250 salariés et + 2.6 34.0 657.4 2.8 32.7 709.0

Business take-over by activity Pers. Services Trade Food industry Construction Industry Services to entrep Education, health Transport Real estate 1998 19 979 17 198 4 103 3 502 3 080 2 635 1 528 1 174 504 2001 19 812 15 420 3 882 3 555 2 655 2 627 976 1 046 480 % 98/01 -0,8% -10,3% -5,4% +1,5% -13,8% -0,3% -36,1% -10,9% -4,6%

Units involved in the process Unit which is taken over : sole proprietorship 1998 21 411 13 334 2001 18 289 13 262 % 98/01 -14.6% -0.5% Sole propr. Company Unit which is taken over : Company -4.7% +15.9% Sole propr. Company 4 214 10 442 4 015 12 105

Comments from our users Prop 1: Exclusion of sectors of education & health from the statistics Prop 2 : Analyse of take-over of enterprises that belong to an Enterprise Group separately Prop 3 : Detailed analyse should be done on enterprises with less than 50 employees Prop 4 : Question of purchase of shares should be much more investigated