Criteo abandons France to enable potential U.S. acquisition

Criteo S.A. announced on October 29, 2025, that it will abandon its French domicile to enable transactions currently blocked by French corporate law. The commerce media platform company disclosed plans to transfer its legal headquarters from France to Luxembourg through a cross-border conversion expected to complete in the third quarter of 2026. The strategic move addresses France's inability to facilitate direct mergers with U.S. corporations, a limitation that effectively prevents acquisition by American buyers.

The announcement came alongside third quarter financial results showing revenue of $470 million and net income of $40 million. According to the company's investor FAQ document, "French law does not provide a framework for direct merger into a U.S. corporation, while Luxembourg offers a well-established and tested regime for cross-border mergers with U.S. companies."

Michael Komasinski, Chief Executive Officer, stated: "Our growth in media spend this quarter reflects steady progress on our strategy with strong execution. Our ability to deliver measurable outcomes across channels continues to differentiate Criteo and build momentum." The statement made no reference to the company's French origins or the corporate restructuring.

Merger framework drives domicile change

France's corporate law prevents a transaction type that dominates technology sector consolidation: acquisition by U.S. companies through direct merger. This legal constraint became the primary driver for Criteo's decision to leave France after more than two decades of operation under French law.

The company's board conducted what it describes as a "thorough review" of the optimal corporate structure before concluding that France's merger limitations created unacceptable barriers. While the FAQ document states the conversion is not "driven by M&A considerations," it acknowledges critical language: "a simplified corporate structure in Luxembourg or the United States, could facilitate future strategic transactions more easily than Criteo's current French structure should opportunities arise that serve shareholder interests."

The distinction matters significantly in practice. A French-domiciled company cannot execute a direct cross-border merger into a U.S. acquirer. Any U.S. company seeking to acquire Criteo faces complex multi-step transactions rather than straightforward merger structures. Luxembourg eliminates this constraint through what the FAQ document describes as "a well-established and tested regime for cross-border mergers with U.S. companies."

For a commerce media platform operating in a consolidating market, the ability to execute direct mergers with potential U.S. acquirers represents strategic flexibility. The retail media sector has attracted significant attention from larger technology and e-commerce companies. Amazon operates its own retail media platform. Walmart Connect competes directly. Google designated Criteo as its first onsite retail media partner in September 2025.

According to the FAQ document, "The Conversion is the result of a thorough review by Criteo's Board of the optimal corporate structure to unlock sustainable shareholder value and compete effectively in the global technology sector." The board determined that maintaining French domicile imposed structural disadvantages that Luxembourg or U.S. domicile would eliminate.

The conversion will provide what the company calls "immediate benefits" including reduced corporate structure complexity and increased share repurchase flexibility. These operational improvements accompany the strategic optionality around potential acquisitions.

Luxembourg serves as acquisition gateway

Luxembourg provides the legal infrastructure France lacks. The Grand Duchy's corporate law enables direct cross-border mergers with U.S. companies through tested mechanisms. A U.S. acquirer could merge directly with a Luxembourg-domiciled Criteo using established procedures unavailable for French targets.

The conversion requires several regulatory steps. Consultation with Criteo's French works council must occur for a maximum period of two months. Following board approval of conversion documents, Criteo will file a Registration Statement on Form S-4 with the SEC and coordinate listing procedures with Nasdaq. An extraordinary general meeting will convene in the first quarter of 2026, requiring a two-thirds majority of votes cast by shareholders present or represented.

Shareholders opposing the move can exit by surrendering shares for cash. Those voting against the conversion at the extraordinary general meeting will have the right to receive EUR 17.94 per American Depositary Share, based on the 30-day volume-weighted average price preceding October 29, 2025. The conversion faces conditions that total exits cannot exceed EUR 94.25 million or 10% of outstanding share capital.

French and Luxembourg authorities must complete compliance and legality checks before finalization. The company can abandon the conversion up to three days prior to the shareholder vote if circumstances change. According to the FAQ document, "Prior to shareholder approval of the Conversion, the Conversion can be abandoned by Criteo's Board of Directors if circumstances change or if it is determined not to be in the Company's best interests."

U.S. domicile follows Luxembourg conversion

The Luxembourg move represents an intermediate step. According to the FAQ document, "Following the completion of the Conversion (expected in Q3 2026), Criteo intends to pursue a subsequent transfer of its domicile to the United States." A U.S. domicile offers even greater strategic flexibility than Luxembourg for potential transactions with American acquirers.

The specific timing for U.S. redomiciliation depends on market conditions and regulatory requirements. The company states that "assuming that the Conversion is completed in Q3 2026, a redomiciliation to the United States could be completed as early as Q1 2027."

A U.S. domicile provides an additional benefit beyond merger facilitation: stock index inclusion. According to the FAQ document, the current status as "a French-domiciled company with ADSs, which makes us ineligible for most major U.S. indices" creates structural barriers. A U.S. domicile "would enable eligibility for major U.S. stock indices, providing access to the substantial pool of passive capital that tracks these benchmarks."

The FAQ document acknowledges: "While the Conversion will position us for potential inclusion in certain U.S. indices subject to meeting other eligibility criteria, a U.S. domicile would provide broader eligibility for major U.S. indices, which serve as benchmarks for the vast majority of passive funds and many actively managed funds."

The American Depositary Shares structure will be terminated following the Luxembourg conversion. Criteo's ordinary shares will be directly listed on Nasdaq, with shareholders holding ordinary shares rather than ADSs. The company will remain subject to U.S. securities laws and SEC reporting requirements throughout the transition.

Market consolidation creates acquisition context

The retail media sector has experienced significant consolidation activity. Large technology companies have acquired smaller retail media platforms or built their own solutions. The ability to facilitate acquisition by U.S. buyers becomes strategically relevant in this environment.

Criteo operates retail media programs for approximately 225 retailers globally, serving more than 4,100 brands. The company processes media spend of $4.3 billion on a trailing 12-month basis. The scale positions Criteo as a potential acquisition target for larger platforms seeking retail media capabilities.

Strategic partnerships announced throughout 2025 demonstrate market interest in Criteo's platform. Google designated Criteo as its first onsite retail media partner in September. A partnership with dentsu in June marked the first time a major holding company deployed Criteo's complete Commerce Media Platform stack. WPP Media collaborated on commerce-driven Connected TV activation in July.

The company faces challenges alongside growth opportunities. Two specific retail media clients reduced their scope in the first quarter, with the largest client discontinuing managed services while maintaining technology platform usage. The reduced scope is expected to result in a $25 million negative impact in 2025 and approximately $75 million for the first ten months of 2026.

For potential acquirers, these client dynamics could present either risk or opportunity depending on platform integration strategies. A larger technology company might view Criteo's retail network and commerce data as complementary to existing advertising or e-commerce operations.

Financial performance shows margin expansion

Revenue for the third quarter reached $470 million, representing a 2% increase from $459 million in the prior year period. At constant currency, revenue remained flat. Gross profit increased 11% to $256 million, with gross profit margin expanding to 55% from 51%. Net income surged 552% to $40 million from $6 million.

Contribution ex-TAC, the company's primary profitability metric excluding traffic acquisition costs, increased 8% to $288 million, or 6% at constant currency. Adjusted EBITDA rose 28% to $105 million, producing a 36% margin compared to 31% in the third quarter of 2024.

The margin expansion demonstrates improving unit economics. For potential acquirers evaluating Criteo's platform, the adjusted EBITDA margin of 36% suggests a business model capable of generating significant operating leverage at scale.

Sarah Glickman, Chief Financial Officer, stated: "We delivered strong top-line growth and Adjusted EBITDA margin, with robust Free Cash Flow, demonstrating the power of our operating model. We are balancing disciplined operational execution with smart investments in AI innovation to drive shareholder value."

Operating expenses decreased 8% year-over-year to $205 million, driven by resource allocation discipline and lower equity award compensation expense. Non-GAAP operating expenses remained flat at $158 million.

Cash flow from operating activities reached $90 million, up 56% from $58 million in the prior year period. Free cash flow increased 74% to $67 million from $39 million. The company deployed $115 million for share repurchases in the first nine months of 2025.

As of September 30, 2025, cash and marketable securities totaled $296 million. Total financial liquidity approximated $811 million, including cash position, marketable securities, revolving credit facility, and treasury shares reserved for acquisitions.

Retail media growth continues despite headwinds

Retail media revenue grew 10% at constant currency during the quarter. Retail media Contribution ex-TAC increased 11% at constant currency, driven by continued strength in onsite advertising formats and new client integrations. The segment now serves more than 4,100 brands across its retail network.

New partnerships announced during the quarter included DoorDash, Sephora, The Fragrance Shop, Zepto, Migros, Interdiscount, and Massmart. The DoorDash partnership, announced in early October, extends Criteo's presence into the delivery marketplace sector through a multi-year agreement.

Performance media Contribution ex-TAC increased 5% year-over-year at constant currency, supported by the company's suite of commerce solutions addressing the full buyer journey. Growth occurred despite lower AdTech services revenue, reflecting ongoing industry trends toward platform technology solutions.

Media spend totaled $1.0 billion in the third quarter, up 4% year-over-year at constant currency. The company processes transactions across 17,000 e-commerce sites, 200 global retail partners, and thousands of open web publishers, collectively representing over $1 trillion in annual e-commerce sales.

Throughout 2025, Criteo expanded its platform capabilities systematically. In June, the company launched auction-based display technology, shifting from fixed pricing to advertiser-driven bidding mechanisms. A global integration with Mirakl Ads in July targeted mid-to-long-tail advertisers and marketplace revenue.

The company appointed Edouard Dinichert as Chief Customer Officer. Dinichert joins from Amazon, where he held leadership positions in the e-commerce division. The Amazon background brings relevant experience from the dominant retail media platform.

Fourth quarter guidance reflects client adjustments

For the fourth quarter of 2025, Criteo expects Contribution ex-TAC between $325 million and $331 million, representing a decline of 5% to 3% year-over-year at constant currency. Adjusted EBITDA is projected between $113 million and $119 million.

The guidance reflects what the company describes as "temporary impact of previously communicated scope changes with two specific Retail Media clients." These adjustments should not be viewed as indicative of 2026 run-rate performance, according to the company.

For the full year 2025, the company maintains expectations for Contribution ex-TAC growth of 3% to 4% at constant currency. Adjusted EBITDA margin guidance increased to approximately 34% of Contribution ex-TAC from previous guidance of 33% to 34%.

Analyst consensus compiled by Criteo indicates expectations for full-year 2025 Contribution ex-TAC of $1,168.7 million, representing 3.2% growth at constant currency. For 2026, analysts project Contribution ex-TAC of $1,188.3 million, representing 1.7% growth.

The guidance assumes no additional acquisitions during the fourth quarter and specific exchange rates: U.S. dollar-euro at 0.886, U.S. dollar-Japanese yen at 149, U.S. dollar-British pound at 0.756, U.S. dollar-Korean won at 1,409, and U.S. dollar-Brazilian real at 5.81.

Geographic performance reveals regional dynamics

Regional results showed divergent patterns. Americas revenue increased 2% to $201.978 million but declined 1% at constant currency. EMEA posted 8% growth to $174.335 million, benefiting from favorable currency movements. APAC grew 3% to $93.347 million.

The geographic distribution positions Criteo across major commerce markets. For potential acquirers, the international footprint provides existing infrastructure in key regions. Days sales outstanding stood at 64 days at the end of September, down from 65 days in the prior year period.

Headcount reached 3,650, representing 4% year-over-year growth. The workforce spans technical development, sales operations, and client services functions. Employee-related expenses factor into acquisition valuations for technology companies.

Transaction costs remain undisclosed

The FAQ document provides limited disclosure regarding conversion costs. According to the company, "While we anticipate some closing costs and possibly exit taxes in certain jurisdictions, they are not expected to be material to Criteo."

Tax treatment varies by jurisdiction. The FAQ document directs shareholders to "refer to the consolidated summary of tax treatment for shareholders in various jurisdictions in the Company's Registration Statement on Form S-4 to be filed following announcement of the Conversion, including for French resident and U.S. resident shareholders."

A Registration Statement on Form S-4 will be filed with the SEC, including a preliminary proxy statement for the special shareholder meeting. The definitive proxy statement and prospectus will be mailed to shareholders once the registration statement is declared effective.

The company disclosed that certain executive officers and employees may be deemed participants in the solicitation of proxies. Information about directors and executive officers appears in the proxy statement for Criteo's 2025 Annual Meeting of Shareholders, filed with the SEC on April 29, 2025.

Once the Luxembourg conversion completes, reversing it would require a separate corporate transaction with its own regulatory requirements and shareholder approval. According to the FAQ document, "Once the Conversion is completed, reversing it would require a separate corporate transaction with its own regulatory requirements and shareholder approval."

Timeline

• May 2, 2025: Criteo announces Q1 2025 results and reveals largest retail media client will discontinue managed services, impacting revenue by $25 million in 2025 and $75 million in 2026
• June 13, 2025: Partnership with dentsu announced, first major holding company to deploy complete Commerce Media Platform stack globally
• June 17, 2025: Company launches auction-based display technology, abandoning fixed pricing for programmatic bidding across retail networks
• July 17, 2025: Global integration with Mirakl Ads targets mid-to-long-tail advertisers and third-party sellers
• July 29, 2025: WPP Media partnership launches commerce-driven CTV activation across Roku, Samsung, and Scripps
• July 30, 2025: Q2 2025 results posted with revenue of $483 million and raised full-year margin guidance
• September 10, 2025: Designated as Google's first onsite retail media partner, enabling direct campaign management through Search Ads 360
• October 6, 2025: Multi-year DoorDash partnership announced for retail media expansion across delivery marketplace
• October 29, 2025: Criteo announces Q3 2025 revenue of $470 million and intention to abandon French domicile for Luxembourg, citing France's inability to facilitate direct mergers with U.S. corporations
• Q1 2026 (expected): Extraordinary general meeting convenes for shareholder vote requiring two-thirds majority approval of Luxembourg conversion
• Q3 2026 (expected): Completion of Luxembourg conversion, termination of ADS structure, and direct Nasdaq listing of ordinary shares
• Q1 2027 (potential): Earliest possible completion of U.S. redomiciliation, subject to board determination, market conditions, and regulatory approvals

Summary

Who: Criteo S.A., a Nasdaq-listed commerce media platform company founded in France and operating under French law since inception, with 3,650 employees globally. The company operates retail media programs for approximately 225 retailers and serves more than 4,100 brands. Leadership includes Chief Executive Officer Michael Komasinski, Chief Financial Officer Sarah Glickman, and newly appointed Chief Customer Officer Edouard Dinichert from Amazon.

What: Criteo reported third quarter 2025 financial results showing revenue of $470 million, gross profit of $256 million, and net income of $40 million. Simultaneously, the company announced its intention to abandon its French legal domicile through a cross-border conversion to Luxembourg, explicitly citing France's lack of framework for direct merger into U.S. corporations. The conversion terminates the American Depositary Shares structure, replacing it with ordinary shares directly listed on Nasdaq. Luxembourg's established regime for cross-border mergers with U.S. companies enables transactions that French corporate law prevents. Shareholders opposing the move can exit at EUR 17.94 per ADS.

When: The financial results cover the quarter ended September 30, 2025, announced on October 29, 2025. Consultation with the French works council begins immediately for a maximum two-month period. An extraordinary general meeting requiring two-thirds majority approval will convene in the first quarter of 2026. The Luxembourg conversion is expected to complete in the third quarter of 2026. A subsequent U.S. redomiciliation could be completed as early as the first quarter of 2027, providing even greater transaction flexibility and U.S. stock index eligibility.

Where: Criteo currently operates under French law with American Depositary Shares listed on Nasdaq. The legal domicile will transfer from France to Luxembourg, with direct listing of ordinary shares on Nasdaq replacing the ADS structure. Potential subsequent transfer to the United States remains under consideration, with U.S. domicile enabling broader eligibility for major stock indices. Geographic revenue for the third quarter split across Americas ($201.978 million), EMEA ($174.335 million), and APAC ($93.347 million). The company maintains $296 million in cash and marketable securities and $811 million in total financial liquidity.

Why: According to the investor FAQ document, "French law does not provide a framework for direct merger into a U.S. corporation, while Luxembourg offers a well-established and tested regime for cross-border mergers with U.S. companies." This legal limitation prevents French-domiciled companies from executing direct cross-border mergers with U.S. acquirers, requiring complex multi-step transactions instead. While the FAQ states the conversion is not "driven by M&A considerations," it acknowledges that "a simplified corporate structure in Luxembourg or the United States, could facilitate future strategic transactions more easily than Criteo's current French structure should opportunities arise that serve shareholder interests." The retail media sector has experienced consolidation activity, with large technology companies acquiring platforms or building competing solutions. The conversion provides strategic flexibility for potential acquisition scenarios while also enabling U.S. stock index inclusion that would provide access to substantial passive capital pools. The company characterizes the move as necessary to unlock sustainable shareholder value and compete effectively in the global technology sector.