Tax consolidation (intégration fiscale) is a French corporate tax regime (CGI art. 223 A) allowing a parent company to be solely liable for the income tax of all French subsidiaries held at 95%+. It generates significant tax savings: losses and profits within the group are offset, intragroup transactions are neutralised, and financial charges on acquisition debt are deductible at group level. In LBO structuring, tax consolidation is a key mechanism enabling deductibility of acquisition debt interest charges at the group operational level — through fiscal integration of the acquisition holding (NewCo) with the target.

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Example: in a French LBO, the NewCo acquirer fiscally integrates its French subsidiaries from year one. Annual acquisition debt interest of CHF 800,000 — non-deductible at NewCo level alone (insufficient profit) — becomes deductible within the integrated tax group, generating a CHF 200,000 annual tax saving (25% French corporate tax rate) that directly improves debt repayment capacity.

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Hectelion integrates French tax consolidation mechanics into LBO structuring mandates to optimise acquisition interest deductibility and group tax efficiency.