Corporate M&A 2021

Last Updated April 20, 2021


Law and Practice


Advokatfirma DLA Piper is a full-service law firm that offers advice within all areas of corporate law, including financing, tax, competition law, employment law, regulatory and litigation. DLA Piper is the only global law firm present in Norway. The corporate team consists of six partners and eight associates, covering private and public M&A, emerging growth and venture capital, private equity and capital markets. The group has experience advising on matters across a range of sectors, including Norway’s most active industry sectors, such as construction, energy and natural resources, with a particular focus on renewable energy and TMT. Recent notable transactions include advice to Zoetis/Pharmaq on their acquisition of FishVet from Benchmark Holding, the sellers of Com4, the IoT company, to Wireless Logic, Storskogen's acquistion of Primulator AS and multiple transactions for the private equity fund Equip Capital and its portfolio companies across the Nordics.

The Norwegian M&A market suffered a significant downturn during the first six months of 2020 due to the COVID-19 pandemic, but market activities have picked up again since Q3 2020. According to reports, 2020 showed a downturn in number of deals in Norway of approximately 20% compared to 2019, with the majority of deals being concluded in the second half of the year. The technology sector has seen the most deals during 2020 compared to other sectors.

In the Norwegian market, a deal size exceeding EUR150 million is considered a large transaction while the clear bulk of reportable transactions have a deal size of between EUR25 million to EUR100 million.

Despite the large number of small and mid-size transactions in the Norwegian market, there are typically some very large transactions with deal value in excess of EUR1 billion. These are often related to the O&G industry, but during 2020 one of the larger notable transactions in Norway was within the technology sector when Adevinta ASA acquired eBay Classifieds for a total compensation of approximately USD9.2 billion. Some sectors such as eg leisure and travel suffered significant losses throughout 2020, resulting inter alia in the reconstruction process of the listed company Norwegian Air Shuttle (NAS), which was a notable event during the year.

A number of planned transactions were postponed during the first half of 2020 as a result of the uncertainty caused by the COVID-19 pandemic, but activity picked up again in the second half of the year.

A new trend in the Norwegian market during 2020 has been the listing of companies on Euronext Growth (previously named Merkur Market) as an attractive exit option for investors as opposed to more traditional M&A. A record number of companies (49) were listed on Euronext Growth during the year, compared to three new listings in 2019.

The 2019 trend that focused on technology targets within a variety of sectors continued through 2020.

Almost all transaction are structured as acquisitions of limited liability companies, ie, sale of shares. There are occasional asset transactions, but such transactions are typically motivated by there being material risks in taking over legacy in a target company. On the buy-side, the buyer typically sets up a Norwegian BidCo structure.

Only a few transactions are completed by way of statutory mergers and the like. Such structures are however sometimes used in industrial public company settings between domestic parties.

M&A activity is in general not supervised by regulatory bodies in Norway.

The Norwegian Competition Authority (NCA) is the only “general” regulator concerned with private M&A (see 2.4 Antitrust Regulations).

Takeover transactions of listed companies are subject to the review of the Oslo Stock Exchange (Oslo Børs) (since 2019 a part of Euronext).

There are a number of sector-specific regulators such as the Financial Supervisory Authority within the banking, insurance and asset management industries, and the Norwegian Water Resources and Energy Directorate in relation to energy and natural resources. There is also significant sector regulation within agriculture and the O&G industry.

There are no general restrictions on foreign investments in Norway. There are, however, various sector specific regulations, which prohibits non-Norwegians from owning certain assets. A material asset class in this respect is Norwegian hydropower assets which prohibits foreigners from owning in excess of one third.

There are also restrictions within the defence industry and certain important infrastructure assets, but the restrictions do not apply per se to all foreigners, but are considered on a case by case basis.

Norway, as part of the EEA, is party to the EU Merger Regulation and this applies provided the transaction meets the turnover thresholds in the EU Merger Regulation.

There are also specific Norwegian merger control rules that applies and there is a mandatory filing requirement if the following thresholds are met;

  • combined annual turnover in Norway of the undertakings concerned exceeds NOK1 billion; and
  • at least two of the undertakings concerned have an annual turnover in Norway exceeding NOK100 million.

There is no specific deadline for filing, except that filing must be completed prior to implementation of the transaction. Transactions cannot be completed prior to clearance, although the NCA may, upon application, grant a partial or full exemption from this obligation.

Parties may voluntarily file a notification and are encouraged to do so if the combined entity will become a dominant entity in the market. In addition, the NCA may order a submission of a notification for a period of up to three months after the transaction is completed or control was achieved (whichever is first) - even where the turnover thresholds set out above are not met.

Labour law regulations are quite relaxed in Norway with respect to acquisitions of Norwegian companies. Norwegian labour law has a number of provisions providing employees with the right to be involved in the business, for instance, by having the right to appoint directors to the Board of a company. Such employee representatives are “true directors” and, thus, do get involved when a target board gets involved in an M&A transaction. Unions are also commonplace in Norwegian companies, in particular in traditional industries. The unions do not have the right to veto or delay transactions.

On share transactions, where the target company regularly employs at least 50 employees, the target company must both inform employees about issues of importance for the employees' working conditions and consult with elected representatives of the employees. Collective bargaining agreements may also include information and consultation obligations.

Consultation should take place prior to any firm decision having been taken and should therefore occur as early in the process as is required in order for a meaningful consultation to take place - ideally, before signing. In practise it is very often done immediately after signing.

An asset deal will constitute a TUPE transfer. In an asset deal, the previous and new employer are obliged, as early as possible, to inform and consult with elected representatives of the employees, with a view to reaching agreement. Both the former and the new employer are also obliged to inform the affected employees as early as possible. The aim is to provide the employees with an opportunity to influence the decision.

There is no general national security review process in relation to acquisitions of targets in Norway. However, the fairly new Security Act entered into force in 2019. This act gives among other things the authorities the right to request applications for approval when specific targets which are considered as being in the "national interest" are acquired and the authorities will have the means to not approve such transactions.

The Security Act provides the authorities with the right to issue a list of “national interest target companies”. Such list has not yet been prepared. The Securities Act and screening regime are not confined to companies in specific sectors, however, they only apply to investments in target companies within the scope of the law by way of an individual decision addressed to the company.

An investment falling within the scope of the Security Act triggers a filing obligation. The filing shall be submitted to the ministry responsible for the sector in which the target company is active. No formal requirements have been laid down for the contents of the filing. The ministry then has 60 working days to assess each filing. However, this deadline may be extended, as the authorities can request the parties to offer further information for the assessment, which will “stop the clock” until the required information is provided.

If an acquisition causes a “not insignificant” risk to national security interests, the Norwegian government may block the transaction, or decide that the investment may only be implemented subject to conditions.

Recent Developments

Rolls-Royce and Russian rail and transport conglomerate Transmashholding entered into a transaction agreement concerning the sale of Bergen Engines for USD180 million.

In the end of March 2021, the Norwegian Government finalised its decision to block the sale of Rolls Royce-owned diesel builder Bergen Engines on the basis of national security interest. The reason given was that Norway’s navy and coast guard are dependent upon Bergen Engines' marine powerplants; according to Norwegian defense authorities, and that Russian ownership would thus be a strategic concern.

There has not been significant court decisions the last three years related to M&A. Most M&A disputes are subject to arbitration and decisions are as a main rule kept confidential.

Tighter interest deduction rules in Norway (and general elsewhere) has had an impact on valuation and debt modelling.

As to general legal development, there have been several disputes and discussions concerning how to calculate a loss due to breach of sellers warranties in share purchase agreements.

Norway’s takeover rules implements the Takeover Directive (2004/25/EF) through the Norwegian Securities Trading Act as of June 2007.

There have not been any significant changes to takeover laws or practises in the last 12 months and there are none expected for the coming 12 months, except that the full implementation of the Market Abuse Regulation (MAR) (see further below) into Norwegian law as from 1 March 2021, has resulted in some practical adjustments concerning “wall-crossing” procedures, the drawing up of insider lists, etc.

In the Norwegian market, stakebuilding is not common, but it is used as a strategy sometimes. A more customary approach is to approach large shareholders prior to a bid launch and seek irrevocable undertakings. In general, it is difficult to persuade shareholders to accept to enter into “hard” irrevocable undertakings as “soft” irrevocable undertakings is the norm; see 6.11 Irrevocable Commitments.

The material shareholding disclosure thresholds (up or down) is regulated in the Norwegian Securities Trading Act Chapter 4 and implements the Transparency Directive. The rules apply to shares which are tradable on a regulated market with Norway as home state.

The reporting thresholds are 5%,10%, 15%, 20%, 25%, 1/3, 50%, two thirds and 90% of the share capital or a corresponding part of the votes due to acquisition, disposal or another event (for instance a share issue diluting a shareholder, resulting in the crossing of a threshold). The rules also apply to rights to shares, including borrowed shares, convertible instruments, options, subscription rights, etc.

The reporting thresholds are regulated in the law and there is no practise of deviating reporting thresholds in articles of association or by-laws. Although a “private” lower reporting threshold in theory could be regulated in the articles of association, it would be a different kind of reporting obligation, and any non-compliance by investors would not have the same kind of consequences.

As to hurdles to stakebuilding, there are no particular rules apart from possible restrictions due to access of “inside information” and the mandatory tender offer rules (see 6.2 Mandatory Offer Threshold).

Dealings in derivatives is allowed and it is common in the Norwegian market.

Derivatives and other financial instruments (most common convertible bonds) giving rights to underlying shares listed on a regulated market are subject to the same disclosure obligations as shares (see 4.2 Material Shareholding Disclosure Threshold).

Additionally, the European Market Infrastructure Regulation (EMIR) requires that all dealings in OTC and exchange-traded derivatives are cleared and reported to ESMA’s register in accordance with the EMIR regulation.

When disclosing crossing a threshold, an investor acquiring shares does not have to make known the purpose of the acquisition or further intentions. However, if an investor/bidder launches a voluntary offer, the takeover rules lay down information requirements to the voluntary offer document. This includes commenting on the purpose of the acquisition and future plans for the target company as well as what effects the completion of the offer will have on the employees as well as legal and tax consequences of the offer. 

MAR has from 1 March 2021 been fully implemented into Norwegian law by a reference in the Securities Trading Act and all aspects of MAR are now Norwegian law. An issuer (target) listed on a regulated market or a multilateral trading facility (as Euronext Growth) is required to make timely disclosure of “inside information” that directly concerns the issuer.

The issuer may, however, decide to postpone the disclosure of such inside information if immediate disclosure is likely to prejudice the legitimate interests of the issuer, the delay is not likely to mislead the public and the issuer is able to ensure the confidentiality of such information. Practically, in a friendly situation an issuer will, when entering into discussions with a bidder, use its right to delay public disclosure. An issuer is in such circumstance Under the Oslo Stock Exchange Rule Book obligated to  report the situation to the Oslo Stock Exchange which, typically in such situations, will follow trading patters closely.

In a takeover situation, the bidder and target issuer will coordinate public disclosure and it typically takes place immediately following signing of the transaction agreement between issuer and bidder.

In a hostile situation, the issuer may, on the basis of the above main disclosure rules, decide to make public the fact that a possible bidder has approached the issuer with an indication to bid.

Previously, there were tendencies in the Norwegian market that issuers withheld inside information (imminent launch of bids) too long as this was required by the bidder. With the implementation of MAR in the Norwegian rules and now as direct law in Norway, this “issue” has to a large extent been resolved.

In public takeovers, it is often expected that the bidder conducts a preliminary due diligence based on publicly available information before advance negotiations are commenced with the issuer target. The obligation to launch the offer is normally subject to a confirmatory due diligence which shall be completed before a transaction agreement is executed and/or the bidder launches the tender offer.

There are often discussion/negotiations concerning the scope and time line for the due diligence. The due diligence often comprises legal, financial and operational matters. The typical time span is two to three weeks. Issuers are, typically, very focused on not becoming involved in dragged out processes which diverts time from other strategic and operational matters.

Both stand-still and exclusivity are typical matters for negotiation. If exclusivity is granted, it is typically for rather short periods of time as issuer wants to retain flexibility. The stand-still obligation is often required by the issuer in public transactions and is of particular importance when disclosure of quarterly reports/management accounts to bidder is deemed to be inside information prior to public release.

It is quite common to detail tender offer terms in the definitive transaction agreement with the issuer. Further, it is also seen that well advanced tender document drafts are attached to the transaction agreement. The issuer wants to protect itself against the bid turning out to be less attractive than anticipated. However, the bidder wishes to ensure that the issuer’s Board recommend its shareholders to accept the offer.

The process for acquiring/selling a business in Norway typically takes two to four months from “launch” to possible buyers until signing of share purchase agreement. However, the process varies significantly, and many business sales takes much longer. The last couple of years have seen an increase in time span for various reasons, such as requirements of more in-depth due diligence, increased tension concerning agreement on commercial terms, etc. This issue became more relevant due to COVID-19 and, in particular, in the second and third quarter of 2020, many transaction processes stopped and/or took much longer time than “normal”.

The mandatory offer threshold in Norway is ownership of one third of shares or votes in an issuer listed on a regulated market with Norway as home state.

In public to private transactions, cash consideration is preferred for several reasons both by the selling shareholders and, to some extent, by the bidder. Using shares as consideration creates a number of complexities concerning valuation of consideration shares as well as tactical considerations, mainly as the following mandatory tender offer must be an all cash offer. It also involves significantly more burdensome documentation as there will typically be prospectus requirements also on the bidder’s consideration shares.

Pursuant to the Securities Trading Act, a mandatory tender offer may not include any conditions. A takeover process is therefore almost always structured by way of bidder first issuing a voluntary tender offer, in which a bidder is free to set conditions. Common conditions are:

  • that bidder received acceptances bringing Bidder up to more than 90% ownership upon completion (sometimes seen is ownership condition of more than 50% or more than two thirds);
  • required regulatory approvals obtained; and
  • no material adverse effect.

The most common minimum acceptance condition is more than 90%. There are several reasons for this. Firstly, it is the threshold for the bidder to be able to conduct a squeeze-out, and thereby become a 100% owner which also results in a swift process to de-list the issuer from the Stock Exchange.

Secondly, owning more than 90% also allows for tax consolidation.

The main relevant control threshold in Norway is more than 50%, which entitles a shareholder to appoint the Board of Directors, decide on dividends, consolidate the accounts of the target company and in general instruct the Board related to the operations of the company. In practice, however, such control in a listed company typically kicks in at lower ownership levels due to that a significant number of shareholders does not attend or vote at general meetings.

The next control threshold is two thirds ownership, as an owner then can pass various material corporate resolutions such as changes to the company’s capital, mergers and changes to the articles of association.

A voluntary tender offer can contain a financing condition, but such a provision will clearly make the offer less attractive, and it will be more difficult to obtain irrevocable undertakings from the major shareholders prior to launch of the offer. In Norway, even if there is no financing condition, a bidder issuing a voluntary offer does not need to prove certain funds. In the voluntary tender offer document, it is customary to provide certain information concerning the contemplated financing of the offer.

A mandatory tender offer requires certain funds in the form of bank guarantee. There are detailed legal regulations concerning the content and wording of such guarantees and the guarantee must be pre-approved by the Stock Exchange.

In a friendly transaction process, the parties typically enter into a transaction agreement prior to launch of the offer by the bidder. It is quite customary that such transaction agreement includes various deal security measures, but target Board is always considering its fiduciary duties with respect to securing the best possible transaction terms from the current bidder or any alternative bidder which may surface during the tender offer period.

The legal framework for tender offers in Norway makes force-the-vote provisions superfluous, as the target company as such does not have any decision power as to whether the offer shall be accepted or not. The decision lies fully with the shareholders. The transaction agreement, however, typically includes provisions in which the Board commits to recommend the offer to its shareholders. The background for this is partly that under the takeover rules the Board does have a duty to provide a statement as to the offer. In not so friendly bid situations, it often occurs that the Board in its statement to the shareholders, does recommend the shareholders not to accept the offer.

Matching rights are quite common while break-up fees are often not a part of such agreements. One significant reason for why break fees are not commonly used is that Oslo Stock Exchange has issued guidelines in practise only allowing for break fees which covers bidders' reasonable costs and expenses in connection with the transaction process. Even though such amounts may be not insignificant, it typically does not serve as a deterrent for competing bids. The target Board is typically also concerned about complying with its fiduciary duties by accepting significant break fees.

In Norway it is very uncommon with specific governance rights provided to certain shareholders in listed companies, as this typically also will conflict with the equal treatment of shareholders doctrine. As stated in 6.5 Minimum Acceptance Conditions, a bidder having more than 50% can appoint the directors, and correspondingly a shareholder with less than 50% may not require a board seat.

In a friendly situation, however, it is rather common that a material minority shareholder is offered a board seat via discussions with other significant shareholders or by being proposed by the nomination committee. All shareholder elected directors are elected by the general meeting of shareholders (in some larger companies the shareholder elected directors are appointed by a “corporate assembly” (bedriftsforsamling) and this body’s shareholder elected members are in such case elected by the general meeting.

Shareholders may vote by proxy and issuers have, in the last few years, made significant efforts to make this as easy as possible. A proxy can, under Norwegian company law, always be withdrawn up to the time of the actual general meeting.

A shareholder owning in excess of 90% of the shares, may initiate a squeeze-out process and thus immediately become owner of all shares in the company. The process is initiated by a board resolution in the bidder and notice sent to all other shareholders concerning the squeeze-out. There is a requirement that the bidder has provided a bank guarantee for the total squeeze-out amount (share price times number of shares subject to the squeeze-out) at the latest at the same time as the notice is submitted.

The minority shareholders do have a two-month period in which to dispute the squeeze-out price. It is however important to note that the bidder upon the resolution to carry out the squeeze-out – irrespective of a disputed share price and prior to the two months period – does become owner of the shares, and thus from such date has full control over the target company and may initiate the de-listing from the stock exchange.

A dispute with the minority shareholders subject to the squeeze-out will thus only concern the amount to be paid for the acquired shares. In events were there has been a customary takeover process with acceptances of most shareholders and the squeeze-out is initiated within three months from the end of the offer period, the main rule is that the squeeze-out price shall be the same as the tender offer price.

In more special complex situations, in which the fact that a bidder did obtain in excess of 90% does not itself indicate that the offer price was on arms-length basis, the courts may conclude on a higher price and the bidder will be bound to pay such amount to the minorities.

Other mechanisms to obtain ownership of additional shares can be mergers and combinations with other assets of the majority shareholder and/or directed share issues to dilute minorities to under the 10% threshold. Typically, such processes create issues concerning arms-length terms and often the bidder instead waits a certain period and reverts with new offers and gradually obtains more than 90%.

As discussed in 4.1 Principal Stakebuilding Strategies, it is quite common to obtain irrevocable commitments to tender. The customary process is that negotiations are ongoing for a while with representatives of significant shareholders (who are often also directors of the target company) and discussions concerning the irrevocable commitments are part of the main discussions. Typically, both target and bidder want to secure additional irrevocable commitments also from “professional outsiders”. Such investors (often fund managers) will typically be approached a couple of days before planned launch after having agreed to become insiders.

Typically, the irrevocable commitments are “soft”, meaning that they provide an out if a better offer is made and not matched by the initial bidder.

It follows from the Securities Trading Act Chapter 6 that, when a bidder has resolved to make a voluntary bid, the Oslo Stock Exchange and the target company shall immediately be notified and the Stock Exchange shall make information about the offer public. The target company is also obligated to immediately make the offer public. When transaction agreements are entered into, there is a co-ordinated public announcement.

Disclosure requirements in connection with issuance of shares in a business combination depends heavily on the situation. If shares are offered to more than 150 persons, and the value thresholds are met while the exceptions do not apply, the issuer will have to prepare a full EU prospectus in compliance with the Prospectus Directive.

However, if shares only are issued to one other party in a business combination, there are no specific disclosure requirements. The issuer does, however, have a general duty to provide the subscriber with key information regarding the issuer and its business. Otherwise it is up to the receiver of shares to consider extent of its due diligence.

If the business combination is done by way of formal statutory merger, the parties will have to enter into a merger plan and have this approved by the respective general meeting of the two (or more) merging entities. There are detailed rules concerning content of the merger plan and its exhibits, which includes inter alia the latest annual reports and accounts, valuation principles and consequences for the merging entities and their employees.

There is no requirement for the bidder to include financial statements concerning itself (except when it is required to draw up a prospectus). Typically, bidders do include general information and key financial numbers in offer documents. There is a requirement that target financial statements are included in the offer document.

The transaction agreement and/or other transaction documents do not have to be disclosed in full, although the Oslo Stock Exchange prefers that the entire document is attached. If the transaction agreement is not attached, a rather comprehensive summary of the terms and conditions needs to be included in the offer document.

In general, the directors of a company have a fiduciary duty towards the company and all of its shareholders while also having a general obligation to take into consideration the interests of other stakeholders of the company, such as employees, contractual partners and the society at large.

However, in a business combination, the primary obligation of the directors will be to maximise share value for the shareholders. There is a general obligation for the Board to treat shareholders equally and in a business combination this principle is very important. A practical issue in this respect is that an acquiring party often requests that a major shareholder in the target company reinvests a part of its proceeds in the acquirer. This is in most cases acceptable but will often require that the transaction is structured in a certain way.

In listed companies it is quite common to operate with various special committees, for instance financial reporting committee and remuneration committee. Under Norwegian law however, the clear starting point is that it is the full Board as a collegium which is responsible for all actions or omissions in a board (although the liability is on an individual basis). The concept of special or ad-hoc committees are, therefore, less common than in some Anglo-Saxon jurisdictions.

In business combinations, it is the full Board which makes final decisions (sometimes subject to approval by the general meeting), but from a practical perspective it is not uncommon that certain directors are appointed by the full Board to participate with members of senior management (typically CEO and CFO) in negotiations and that such negotiation team thus forms an ad hoc committee.

As to conflict of interest, the normal procedure under Norwegian company is that the conflicted director(s) are excluded from the board’s handling of the matters in which they are conflicted. A special committee is thus not established.

In takeover situations, as mentioned, it is in most cases the shareholders who have the final decision, while the Board’s role in practise often is to negotiate a best possible offer on behalf of the shareholders, and then recommend or not recommend to the shareholders to accept the offer. There is no tradition in Norway for courts to be involved at all in relation to takeover situations..

A discontent shareholder may sue the directors personally for its losses, and this could include the delta between a fair price and a too low price. However, since it is up to the shareholders to accept the offer, it is very unlikely that such lawsuit will be successful in relation to a public takeover situation.

In relation to an asset sale or sale of a significant subsidiary which has not been subject to shareholder approval, the test is whether the board has conducted a prudent process and assessed the overall considerations in light of relevant circumstances when deciding to transact with a material asset. In such situations, the court will be very hesitant to rule that the directors acted negligent and thus are liable towards the shareholders.

From that perspective, it is fair to conclude that the “business judgement rule” is a very strong principle in takeover situations.

It is very common for companies to retain outside financial advisers which are mandated to assist the board in business combinations. A key part of such advice is to provide support on valuation issues and issue fairness opinions.

In public to private transactions it is mandatory for the board of a target company to retain an independent financial advisor to provide a fairness opinion on the offer and this is used as support for the board’s recommendation to its shareholders with respect to the offer. If the public offer is recommended by the Board in a transaction agreement, the Stock Exchange will further require the target company to obtain an independent fairness opinion from an independent investment bank or auditor.

Legal advisers are also retained by the issuer. Sometimes separate legal counsel is retained by the Board. This is, however, not very common.

The principle of conflicted directors having to withdraw from board considerations is a well-established principle and regulated in the Norwegian Companies Act.

Even though according to the law, the threshold for conflict is rather high, it seems to be rather well-established that directors who are related to a possible bidder or acquirer withdraw from the Board’s dealing with the transaction.

As to shareholders, the general rule is that shareholders are not conflicted, and are allowed to vote on a subject matter irrespective of commercially being in conflict.

As to advisers, the general view is that advisers manage to keep Chinese walls, but that conflict considerations are made prior to them being retained.

Hostile tender offers are permitted and, although not common (as the success rate typically is much lower than for friendly tender offers), they do occur in the Norwegian market.

As the duty of the directors in general is to maximise value for shareholders and it is the shareholders and not the target company which decides to accept a tender offer or not, it is rather uncommon with defensive measures in the Norwegian market.

Typically, the Board will make efforts in inviting other possible bidders to the table if approached.

There are also restrictions under Norwegian law when it comes to defence measures. In the Securities Trading Act, there are restrictions for the target company from the date on which it is notified about an offer to issue shares (also in subsidiaries), acquire or sell material assets, be a part of mergers and acquire target company shares. There, however, are exceptions to this rule; it requires that the general meeting on beforehand has resolved that such defensive matters may be used in case a tender situation arises in the future.

As mentioned in 9.2 Directors' Use of Defensive Measures, common measures would, typically, be issuing of shares to friendly shareholders or third parties (either for cash or acquiring assets) who want to retain the Company. Less material measures are to not accept bidder to perform due diligence and/or invite other friendly possible bidders to make an offer to acquire the company’s shares.

The Board’s duties when enacting defensive measures is typically to have a commercial rationale for why such measures would gain the shareholders of the company, typically because the Board would be of the view that the bidder’s offer price is below the true value of the company or that it has reasons to believe that more attractive offers would appear in the future. This should be seen in the context of the company’s overall strategy.

The Board would also need to consider the alterative in case a bidder withdraws because of the defensive measures, and be able to defend its decision to implement defensive measures towards its shareholders.

The Board does have such a right, but to support that it has been prudent and fulfilled its fiduciary duties, the Board would need to have reasonable grounds for its decisions.

The Board can not hinder an offeror to make a public offer on the company’s shares. Also, in private companies, and offer can make an offer directly to the shareholders circumventing the board of directors.

Litigation is very uncommon with respect to M&A deals in the Norwegian market.

When there is litigation (or arbitration), it typically relates to damage claims for breach of Sellers’ Warranties in Share Purchase Agreements. In public to private transactions this is seldom relevant, as it is not market practice for the sellers to give any representations or warranties.

In somewhat complex tender offers and squeeze-out situations, there are sometimes litigation concerning the mandatory tender offer price and/or squeeze-out price.

As commented in 10.1 Frequency of Litigation, litigation is typically brought post-completion.

In general, there has not been publicity around conflicts due to “broken deal” issues on the basis of COVID-19. It may be that there are ongoing disputes (typically confidential arbitration matters) concerning “walk-aways”, but our impression is that there are not many of those in the Norwegian market.

Shareholder activism is still not very common in the Norwegian market. However, for some years there has been a focus on senior management remuneration issues and option schemes as well as supply chain issues and environmental issues. These issues are typically fronted by certain major asset/pension fund managers.

There are also various examples of investors acquiring meaningful minority stakes and thereafter provide strategic and market views to the Board and or senior management who then considers this. Such investors do sometimes receive invite to become directors and as such participate in the further direction of the Company.

Activist investors often have significant views on improvement and restructuring possibilities, and this does include M&A transactions, spin-offs or major divestitures. It has been occasionally seen that they encourage and succeed in implementing reverse takeovers into listed companies.

In the Norwegian market, it is not typical to see activists trying to interfere with completion of announced transactions, but do see minority shareholders and/or hedge funds positioning themselves after announcement of an offer. Such positioning typically takes the form of share acquisitions and/or co-operation to have sufficient shares to prevent the bidder from obtaining sufficient number of acceptances. The aim is then to await a competitive bid and or force a revised and higher offer.

Advokatfirma DLA Piper Norway DA

Bryggegata 6
0250 Oslo

+47 24 13 15 00
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Law and Practice


Advokatfirma DLA Piper is a full-service law firm that offers advice within all areas of corporate law, including financing, tax, competition law, employment law, regulatory and litigation. DLA Piper is the only global law firm present in Norway. The corporate team consists of six partners and eight associates, covering private and public M&A, emerging growth and venture capital, private equity and capital markets. The group has experience advising on matters across a range of sectors, including Norway’s most active industry sectors, such as construction, energy and natural resources, with a particular focus on renewable energy and TMT. Recent notable transactions include advice to Zoetis/Pharmaq on their acquisition of FishVet from Benchmark Holding, the sellers of Com4, the IoT company, to Wireless Logic, Storskogen's acquistion of Primulator AS and multiple transactions for the private equity fund Equip Capital and its portfolio companies across the Nordics.

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