425: Criteo Proposes Luxembourg Redomiciliation for Strategic Growth

Criteo S.A. plans a cross-border conversion from France to Luxembourg to enhance capital management, facilitate U.S. index inclusion, and streamline its corporate structure.

Summary

• Criteo S.A. (French Criteo) is proposing a redomiciliation from France to Luxembourg via a cross-border conversion into a public limited liability company (Lux Criteo).
• A General Meeting is scheduled for February 27, 2026, at 10:00 am Paris time, for shareholders to vote on the Conversion Proposal and related matters.
• The Board of Directors unanimously approved the Conversion and recommends shareholders vote FOR all proposals, believing it is in the best interests of the Company and its shareholders.
• The conversion aims to position the company for potential inclusion in certain U.S. indices, expand access to passive investment capital, and broaden its shareholder base.
• It will provide greater capital management flexibility by reducing restrictions on share repurchases and treasury share holdings.
• The move will eliminate fees and complexities associated with American Depositary Shares (ADSs), potentially increasing stock liquidity.
• Luxembourg's legal framework is expected to facilitate a subsequent corporate redomiciliation to the United States, which the company intends to pursue if deemed beneficial.
• The company's vision, strategy, and operations, including its AI Lab and R&D in France, will remain unchanged.
• The current share capital of French Criteo is EUR 1,391,497.375 as of January 1, 2026, divided into 55,659,895 shares with a nominal value of EUR 0.025 each.
• Shareholders who vote against the Conversion may exercise a 'Dissenter Option' to surrender their ordinary shares for cash at a price of EUR 17.94 per share.
• The Dissenter Price was determined using the volume-weighted average trading price of Criteo's ADSs on Nasdaq during the 30 calendar days immediately preceding October 29, 2025, using a USD to EUR exchange rate of 0.8598.
• Key conditions for the Conversion include the total number of shares for which the Dissenter Option is exercised not exceeding 10% of outstanding share capital, and the aggregate Dissenter Price not exceeding EUR 94.25 million.
• Other conditions include an affirmative French tax authority ruling, General Meeting approvals, a certificate of conformity, execution of the Constat Deed, effectiveness of the S-4 registration statement with the SEC, and Nasdaq listing confirmation.
• The Conversion must be completed by June 30, 2027 (Long Stop Date), unless extended by the Board of Directors.

Sentiment

Score: 8

Explanation: The filing presents a strong positive sentiment regarding the proposed redomiciliation, highlighting numerous strategic benefits for the company and shareholders, including enhanced capital market access, increased flexibility, and a clear path for future U.S. domicile. While risks are disclosed, they are standard for such a corporate action, and the overall tone is highly optimistic about the long-term value creation.

Positives

• Positions the Company for potential inclusion in certain U.S. indices, expanding access to passive investment capital and broadening the shareholder base.
• Provides greater capital management flexibility by reducing or eliminating current restrictions related to share repurchases and holdings of treasury shares.
• Eliminates fees (including annual fees for ADS holders) and complexities associated with ADSs, potentially increasing stock liquidity.
• Luxembourg's legal regime facilitates a subsequent transfer of corporate domicile to the United States, offering further advantages for index inclusion and capital access.
• The Board of Directors is authorized to acquire up to 11,000,000 shares to mitigate dilution from equity awards and enable dynamic capital management.
• The Conversion is expected to have no material adverse French corporate income tax consequences on the Company, with a tax ruling submitted for confirmation.
• No social consequences for employees; all employment contracts will be maintained without interruption or change, and no job cuts will occur.

Risks

• Failure to obtain the required shareholder vote to adopt the proposals needed to complete the transaction.
• Failure to satisfy any of the other conditions to the transaction, including the condition that the option to withdraw shares for cash is not exercised above a certain threshold (10% of outstanding share capital or EUR 94.25 million aggregate Dissenter Price).
• The transaction not being completed, or being deferred or abandoned by the board of directors.
• The impact or outcome of any legal proceedings or regulatory actions that may be instituted against the company in connection with the transaction.
• Failure to list shares on Nasdaq following the transaction or maintain the listing thereafter.
• Inability to take advantage of the potential strategic opportunities provided by, and realize the potential benefits of, the transaction.
• Disruption of current plans and operations by the transaction.
• Disruption to relationships, including with employees, landowners, suppliers, lenders, partners, governments, and shareholders.
• Changes in shareholders' rights as a result of the transaction.
• Inability to terminate the deposit agreement and withdraw ordinary shares from the depositary to terminate the ADS program.
• Difficulty in adapting to operating under the laws of Luxembourg.
• Following the completion of the transaction, a delay or failure in the ability to redomicile to the United States via a merger into a newly incorporated and wholly-owned U.S. subsidiary for any reason.
• Costs or taxes related to the transaction.
• Changes in general political, economic, and competitive conditions and specific market conditions.
• Adverse changes in the marketing industry.
• Changes in applicable laws or accounting practices.
• Failure related to technology and the ability to innovate and respond to changes in technology.
• Uncertainty regarding the ability to access a consistent supply of internet display advertising inventory and expand access to such inventory.
• Investments in new business opportunities and the timing of these investments.
• Whether the projected benefits of the transaction, acquisitions, or other strategic transactions materialize as expected.
• Uncertainty regarding international operations and expansion, including related to changes in a specific country's or region's political or economic conditions or policies.
• The impact of competition.
• Uncertainty regarding legislative, regulatory, or self-regulatory developments regarding data privacy matters and the impact of efforts by other participants in the industry to comply therewith.
• Ability to obtain and utilize certain data as a result of consumer concerns regarding data collection and sharing, as well as potential limitations in accessing data from third parties.
• Failure to enhance the brand cost-effectively.
• Recent growth rates not being indicative of future growth.
• Ability to manage growth, potential fluctuations in operating results.
• Ability to grow the base of clients.
• Risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results.

Future Outlook

The company intends to pursue a subsequent corporate redomiciliation from Luxembourg to the United States if the Board of Directors determines such action is in the best interests of the Company and its shareholders, subject to required approvals. This move is expected to offer further advantages by allowing broader U.S. index inclusion and enabling broader access to passive capital. The company's vision, strategy, and operations, including its AI innovation, cross-channel reach, full-funnel capability, and self-service flexibility, are expected to remain unchanged, positioning it for the future of commerce and advertising.

Management Comments

• The Board of Directors believes that the Conversion and the Proposals are in the best interests of the Company and its shareholders.
• The proposed Conversion is the result of a thorough evaluation by the Board of Directors of the optimal corporate structure to unlock sustainable shareholder value and compete effectively in the global technology sector.
• The redomiciliation reflects the Board of Directors' confidence in the Company's future and its commitment to ensuring the Company has the optimal structure to create increased shareholder value and compete effectively in the global technology sector, while preserving its French heritage and foundation.
• The Board of Directors determined it would be advisable to have the ability to repurchase shares to mitigate dilution to current shareholders resulting from the vesting of equity awards and to deploy dynamic capital management programs.

Industry Context

This proposed redomiciliation aligns with a broader trend among global technology companies seeking to optimize their corporate structure for enhanced access to capital markets, particularly in the United States. By moving to Luxembourg, Criteo positions itself for potential inclusion in U.S. indices and streamlines its path for a future direct redomiciliation to the U.S., a strategy often employed by international firms to increase liquidity and attract a wider investor base in the world's largest capital market. The focus on 'AI innovation' and 'commerce and advertising' also reflects ongoing industry shifts towards data-driven, intelligent marketing solutions.

Comparison to Industry Standards

• The strategy of redomiciling to a jurisdiction like Luxembourg as an intermediate step towards a U.S. domicile is a recognized approach for international companies aiming for greater integration into U.S. capital markets and potential inclusion in major U.S. indices (e.g., S&P 500, Nasdaq Composite). This is a common goal for companies seeking to attract passive investment funds and benchmarked active funds.
• The authorization for significant share repurchases (up to 11,000,000 shares) and the ability to manage treasury shares more flexibly are standard capital management tools that U.S.-domiciled companies often utilize to return value to shareholders and manage dilution, which may have been more restricted under French law.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased stock liquidity, elimination of ADS fees, greater capital management flexibility, and potential for U.S. index inclusion. Those who vote against the conversion have a Dissenter Option to sell shares for cash.
• Employees: No social consequences, employment contracts maintained, no job cuts, retention of individual and collective rights. Anticipation of employing some personnel in Luxembourg.
• Creditors: Rights are not expected to be modified; contracts and securities remain unchanged. Creditors have a three-month period to file opposition and seek repayment or guarantees for pre-conversion claims.

Next Steps

• Shareholders to attend and vote at the General Meeting on February 27, 2026, on the Conversion Proposal, Charter Proposal, Auditor Proposal, and Delegation Proposal.
• ADS holders wishing to exercise the Dissenter Option must surrender ADSs and withdraw ordinary shares by January 20, 2026.
• The company will file the Conversion Terms with the registry of the Paris Court of Economic Activities on January 7, 2026.
• The company awaits an affirmative answer from French tax authorities regarding the tax ruling request.
• The company will seek a certificate of conformity from the Paris Court of Economic Activities.
• The acknowledgment (constat) deed must be executed by the Luxembourg notary, and the company's amended articles of association notarized.
• The registration statement on Form S-4 filed with the SEC must become effective.
• Confirmation from Nasdaq is required for the listing of ordinary shares following the Conversion.
• Following the Conversion, the Board of Directors intends to cancel treasury shares in excess of 10% of outstanding shares and suspend dividend rights for treasury shares.
• The company intends to pursue a subsequent corporate redomiciliation from Luxembourg to the United States if deemed in the best interests of the Company and its shareholders.

Key Dates

Recommendation

The proposed redomiciliation to Luxembourg, with an eye towards a future U.S. domicile, is a significant strategic move designed to enhance Criteo's access to capital markets, improve capital management flexibility, and potentially increase stock liquidity. While these are long-term positives, the immediate impact on financial performance is not detailed, and the transaction is subject to several conditions and risks. The Dissenter Option provides an exit for dissenting shareholders at a pre-announcement price. For investors, this represents a structural optimization rather than an immediate operational catalyst. A 'hold' recommendation is appropriate as the strategic benefits are long-term and contingent on successful execution, and the filing does not provide new information on the company's core business performance or valuation that would warrant an immediate 'buy' or 'sell' action. Investors should monitor the progress of the conversion and its subsequent impact on market perception and index inclusion.

Keywords

Criteo, Redomiciliation, Luxembourg, Corporate Conversion, SEC Filing, Nasdaq Listing, Shareholder Value, Capital Management, ADS Program, Cross-border Merger, Corporate Governance, Digital Advertising, Performance Marketing, Retargeting, AI Innovation