Despite continued geopolitical instability and high interest rates, the Danish M&A market remained robust during 2024, experiencing an increase in activity in comparison to 2023.

In the first months of 2025, the Danish M&A market has shown indicators of an increased level of activity, particularly in sectors such as energy and technology. That said, the Danish M&A market is marked by uncertainty and a cautious stance, particularly due to the political climate surrounding President Trump. While there are expectations that the Trump administration will ease regulations and lower corporate taxes, many investors remain wary of the uncertainty regarding potential trade conflicts and protectionist policies, lowering their appetite for acquisitions.

In 2024, the transaction types in the M&A market included traditional private M&A transactions, minority/partnership deals, growth capital transactions and a few public M&A transactions. Private equity firms were highly active in 2024, especially in the mid-market segment. Foreign direct equity investments in Denmark were relatively modest compared to recent years, presumably due to geopolitical and economic instability.

Some of the most notable transactions in the Danish market in 2024 included:

• Novo Holdings A/S’s acquisition of Catalent Inc;
• DVS A/S’s acquisition of DB Schenker AG;
• Amedia AS’s acquisition of the Danish newspaper Berlingske A/S; and
• the announced takeover bid in the financial sector from Nykredit A/S to acquire Spar Nord A/S.

The Danish M&A market being dominated by private M&A deals remained a key trend, as did the rarity of significant public M&A transactions in 2024. The deal terms generally remained buyer-friendly and with a trend towards sell-side financed warranty and indemnity (W&I) insurance, more thorough due diligence procedures, vendor financing, escrow accounts or holdbacks, earn-outs and exclusive processes. 2024 was also a year where many deal processes had increased lead time.

As a consequence of the green energy transition targets and the war in Ukraine, activity in the renewable energy sector is continuously high; however, energy companies have started to experience difficulties as the green transition was not implemented as quickly as anticipated, and investors have increased focus on current financial results. Additionally, in light of the recent US presidential election, increased caution and a more hesitant investment appetite in relation to green energy transition may be expected.

As seen with Nykredit A/S’s announced takeover bid to acquire Spar Nord A/S in 2024 and Netcompany A/S’s acquisition of SDC A/S, the financial sector is expected to undergo continued consolidation and changes in 2025 as market pressures and regulatory changes drive M&A. Increasing competition, tighter margins and the growing need for technological investment will likely push smaller players to pursue partnerships or be acquired by larger institutions seeking to enhance their market position and achieve economies of scale.

M&A transactions in the Danish defence sector are expected to be a significant trend in 2025 (as in 2024). This projection aligns with broader European defence industry patterns, where geopolitical shifts and increased defence budgets are driving consolidation and strategic partnerships.

Throughout 2024, there was significant interest in Danish assets within the following industries:

• technology, media and telecoms;
• engineering and industrial products;
• business and professional services;
• defence assets;
• life sciences; and
• real estate, hospitality and construction.

Sectors such as power and utilities as well as consumer products were less active during 2024, possibly due to constraints in obtaining acquisition financing. Accordingly, the technology, media and telecoms industry, together with engineering and industrial products and life sciences, seemed to account for the majority of transactions in 2024. Overall, most sectors have seen an increase in transaction numbers compared to 2023.

An acquisition of a private company is typically completed as an acquisition of the target’s shares, as this is generally considered simpler and more tax-efficient than an asset transfer. Both types of acquisitions are documented by a purchase agreement, the format of which depends on the parties involved and the size and complexity of the transaction. Corporate mergers may also be used for business combinations, but this is rarely seen.

An acquisition of a public company will usually take place as a public takeover (voluntary or mandatory), which is documented by an offer document. Provided that the bidder obtains more than 90% of the shares and votes in the company, the bidder is, according to Danish law, entitled to complete a squeeze-out of the minority shareholders.

In Denmark, private M&A activities are mostly unregulated.

The Danish Financial Supervisory Authority (FSA) is the supervisory authority in respect of public takeovers, issuance of prospectuses and compliance with the EU Market Abuse Regulation (MAR).

The Danish Business Authority is the relevant authority with respect to the various corporate actions that are usually necessary in connection with an acquisition – eg:

• registrations related to direct and indirect ownership;
• amendments to the target’s articles of association;
• registration of changes to the management;
• capital increases; and
• mergers.

In relation to antitrust regulation, filings need to be made with the Danish Competition and Consumer Agency or with the European Commission, as applicable. Individual filings in other jurisdictions may be required.

Certain targets will hold licences to conduct particular types of businesses – eg, debt collection, telecoms, insurance and banking. Regulatory approvals may be required when obtaining control of such businesses.

The Danish Investment Screening Act applies to foreign direct investments made on or after 1 September 2021. The Danish foreign direct investment regime is based on EU Regulation (2019/452) on screening of foreign direct investment, and implements a two-tiered screening mechanism:

• a sector-specific mandatory filing obligation; and
• a general (cross-sector) voluntary filing option.

The mandatory filing obligation is triggered by foreign direct investments (covering all typical M&A deals, including greenfield investments, asset deals and long-term loans) where a non-Danish investor acquires a “qualifying holding” in a Danish undertaking active within a “particularly sensitive sector”. A qualified holding is the direct or indirect possession or control of at least 10% of either the shares or voting rights (as well as increases of holdings that result in the holding constituting or exceeding the thresholds of 20%, one third, 50%, two thirds or 100%), or equivalent control by other means. Equivalent control by other means covers, inter alia:

• rights granting the power to make or approve decisions on significant managerial, financial, developmental or operational matters; and
• rights to appoint or remove members of management bodies.

The mandatory filing obligation is further triggered by “special financial agreements” entered between a non-EU investor and a Danish undertaking within a “particularly sensitive sector”. Special economic agreements are joint ventures or operating, supplier or service agreements, whereby the investor gains control or significant influence over the Danish target.

The five particularly sensitive sectors covered by the mandatory screening mechanism are:

• the defence sector;
• the sector for IT-security functions or processing of classified information;
• the production of dual-purpose products;
• other critical technology (consisting of 11 listed technologies, one of which the target must develop or manufacture in order to be a company within other critical technology); and
• critical infrastructure (consisting of 11 listed subsectors, such as energy and healthcare, which are further divided into a number of socially important functions, for one of which the target must be necessary to maintain or restore in order to be a company within critical infrastructure).

The sector-specific, mandatory screening mechanism applies to all non-Danish investors, while the voluntary screening mechanism applies only to non-EU/EFTA investors. It is the responsibility of the foreign investor to file with the Danish Business Authority and provide comprehensive information and documentation regarding the investment, the target and the foreign investor. If the mandatory filing obligation is triggered, a standstill obligation applies until the Danish Business Authority has approved the investment. There are no filing fees or execution formalities (provided a qualified lawyer in Denmark makes the filing on the foreign investor’s behalf, using the compulsory application form). A filing can either be submitted as a filing for authorisation or a request for a pre-screening (where the Danish Business Authority decides on the isolated question of whether or not a company falls within the scope of one of the five particularly sensitive sectors). In unproblematic cases, the foreign investor can expect a decision within five to six weeks.

Further, as of 12 July 2023, the rules stemming from the Foreign Subsidies Regulation (Regulation (EU) 2022/2560) apply, enabling the European Commission to investigate and address distortions in the EU internal market caused by foreign subsidies.

Key aspects in an EU (and Danish) context include:

• mergers – mandatory notification of certain M&A transactions involving foreign subsidies;
• public procurement – notification requirements for bidders receiving foreign subsidies; and
• ex officio investigations – the Commission can investigate foreign financial contributions even outside notified cases.

Another potential restriction of foreign investments includes the Danish War Materiel Act, administered by the Danish Ministry of Justice. The rules apply when foreign investors acquire specific rights over Danish companies producing military-designed equipment, firearms, ammunition, explosives and related components. If an investment falls under this act, permission from the Danish Ministry of Justice is required.

The Danish merger control regime is laid out in the Danish Competition Act and is based on the principles of the EU Merger Regulation – hence why Danish merger regulation is to a large extent similar to the EU merger rules. The Danish merger rules are generally interpreted in accordance with EU law and practice from the European Commission and the European courts. The concept of a concentration (ie, definition of a merger) as well as the substantive test (the assessment of a merger) is equivalent to the concept and test under EU law.

As under EU merger control, the Danish merger rules apply to mergers and full-function joint ventures that meet the thresholds for notification. If the thresholds are met, a standstill obligation applies, and the concentration must not be implemented before the merger has been notified and approved by the Danish competition authorities.

Concentrations must be notified to the Danish Competition and Consumer Authority where:

• the combined aggregated turnover in Denmark of all the undertakings concerned is at least DKK900 million and the aggregated turnover in Denmark of each of at least two of the undertakings concerned is at least DKK100 million; or
• the aggregated turnover in Denmark of at least one of the undertakings concerned is at least DKK3.8 billion and the aggregated worldwide turnover of at least one of the other undertakings concerned is at least DKK3.8 billion.

Further, as of 1 July 2024, the Danish Competition and Consumer Authority may review and require notification of mergers falling below the thresholds (“call in”) if the combined aggregated turnover in Denmark of the undertakings concerned is at least DKK50 million and there is a risk that the merger in question will significantly impede effective competition, in particular as a result of the creation or strengthening of a dominant position. This call-in option is, in general, available for the Danish competition authorities for up to three months after signing of the merger agreement. However, under certain circumstances (eg, if the parties have kept the merger confidential from the public), the authorities may call in the merger for up to six months after completion of the merger in question.

Besides the Danish merger control rules, the restrictions in Danish competition law against anti-competitive agreements apply to transaction processes.

Accordingly, during negotiations, under a due diligence process and in the period between signing and closing, the parties to the transaction must not engage in anti-competitive practices, such as the exchange of competitively sensitive information. In practice, this is handled by establishing “clean team” procedures when a merger involves competitors.

Share Sale

A share sale generally has limited effect on employment relationships as they are not directly affected by the sale. Danish rules on consultation and information will generally not apply if no material changes affecting employees arise in connection with a share sale.

Asset Sale

An asset sale makes an assessment of the applicability of the Act on Transfer of Undertakings (TUPE) relevant – in particular, whether the transferred assets qualify as an economic entity that retains its identity after the transfer, which is a requirement for TUPE to apply.

TUPE

Under TUPE, employment relationships automatically transfer with the business, and the acquirer assumes the rights and obligations towards the transferring employees. In connection with transfer of a part of a business (carve-out), attention should be paid to employees who are partially working with the transferred activities or are indirectly affected by such transfer. Such employees may be eligible to transfer with a part of their working hours or tasks.

Recent case law from the Danish Labour Court has confirmed that, for a transfer to fall within the scope of TUPE in relation to the service company in question, the takeover of a substantial portion of the workforce must enable the stable continuation of the activity. If a transfer only allows for the continuation of tasks within specific units, without ensuring the continuity of the overall operation, the transfer may be excluded from the scope of TUPE.

Reductions in force and changed employment terms, including changes constituting constructive dismissals in relation to a transfer, are permitted under TUPE on economic, technical or organisational grounds.

Information and consultation requirements must be observed in connection with the transfer of employees. Reductions or constructive dismissals affecting at least ten employees may trigger special information and consultation procedures.

Collective bargaining

If work in an asset sale is subject to collective bargaining, the acquirer has the option of opting out of the applicable collective agreements, provided certain procedural requirements and deadlines are observed. The entitlements awarded to employees under the collective agreements remain in effect until the expiry of the term of the collective agreement as individual employment terms. With effect as of the expiry date, the individual employment terms may be modified under the general rules for changing employment terms.

Restrictive Covenants

Restrictive covenants (non-competition and non-solicitation of business restrictions) are permitted within a comprehensive employee protective framework, including capped duration and compensation requirements.

Non-poaching of employees’ restrictions is only enforceable in connection with share and asset sales during negotiations and for a period of six months following closing.

Incentives

Salaried employees are generally entitled to a pro-rated cash bonus in a termination scenario without consideration of bad leaver conditions.

In connection with certain types of retention bonus, bad leaver conditions on the forfeiture of a bonus may be enforceable.

Several categories of share-based incentives permit full or partial forfeiture for leavers. For incentive schemes established prior to 1 January 2019, employees generally retain the right to granted unvested options and a pro rata share of future options. In respect of incentive schemes established after 1 January 2019, parties have contractual freedom to regulate the treatment of unvested options upon termination, including forfeiture in the case of employer-initiated dismissal without fault on the part of the employer. When assessing what set of rules applies, the Danish Supreme Court has stated that the decisive point in time is when the employer made a legally binding commitment to grant the options.

In certain circumstances, an obligation on the employee to sell back shares of the incentive scheme at a price below fair market value will be void. This is not an issue in respect of publicly traded shares.

See also 2.3 Restrictions on Foreign Investments. The Investment Screening Act requires that certain transactions be filed with and approved by the Danish Business Authority. If the Danish Business Authority decides that the completion of the transaction should be denied, it must refer the case to the Minister for Industry, Business and Financial Affairs, who is authorised to deny the completion of the transaction if the transaction threatens national security or public order.

Court Decisions

Litigation in connection with public M&A deals is fairly uncommon in Denmark.

Litigation in respect of private M&A deals is also uncommon, although the number of claims against W&I insurers seems to be increasing. As most private M&A deals are subject to arbitration clauses, due (inter alia) to the confidential nature of such disputes, very little public information on such disputes is available.

Notwithstanding the foregoing, in November 2023 the Danish Maritime and Commercial High Court ruled in respect of the “Gram Equipment case”. In 2018, Kg BidCo ApS purchased the entire share capital in Gram Equipment from Green Magnum (an SPV owned by Procuritas Capital Investors IV GP Limited). Later in 2018, Kg BidCo ApS filed an arbitration case against Green Magnum with a claim of warranty breach due to irregularities in the accounts in Gram Equipment, which, according to Kg Bidco ApS’s claim, had been largely edited. The tribunal held Green Magnum liable for the breach of the warranty. However, Green Magnum subsequently went bankrupt due to not having sufficient funds to honour the arbitration award.

Subsequently, Kg BidCo ApS filed a claim at the Danish Maritime and Commercial High Court against the former CEO and CFO of Gram Equipment, Procuritas Capital Investors IV GP Limited, and the managing partners of its advisers, Procuritas Partners AB. Procuritas Capital Investors IV GP Limited and the managing partners of Procuritas Partners AB were acquitted, as the Court found that they had not known of the manipulation and irregularities. In relation to the former CEO and CFO, the Court ruled that fraudulent accounting had occurred, and that the day-to-day management had been aware of the manipulation of the financial figures. However, the court found, inter alia, that Kg BidCo ApS had not been able to document any loss, since an accessor had valued the company higher in connection with the trial than what Kg Bidco ApS had claimed; and further that Kg BidCo ApS had received a EUR50 million payout from a W&I insurance. The ruling was given with dissent and has been appealed.

Additionally, in 2014, a Danish company (OW Bunker A/S) was listed on Nasdaq Copenhagen with a value of roughly DKK5 billion. Only seven months after the listing, the company went bankrupt. As a consequence of the bankruptcy, various civil cases primarily relating to prospectus liability and liability for breaches of disclosure obligations in the period leading up to the company’s bankruptcy were filed by investors in the Danish courts. In 2024, a settlement was reached in a group of related lawsuits concerning the bankruptcy, entailing that the plaintiffs in the lawsuits will be compensated for their losses on the investment in OW Bunker A/S with a total amount of approximately DKK645 million. As of February 2025, a court case is still ongoing in which the trustee of the bankruptcy estate claims that the collapse could have been prevented if the owners and management had not neglected their responsibilities. Consequently, the trustee of the bankruptcy estate is seeking DKK1.1 billion in compensation.

Legal Developments

Numerous changes to the Danish Companies Act were implemented in 2024, including the adoption of a bill regarding a reduction of the minimum share capital requirements for private limited companies (in Danish, anpartsselskaber) from DKK40,000 to DKK20,000, with a view to aligning with the share capital requirements for private limited companies in other European countries. The change of the minimum share capital requirement will be practically implemented as soon as possible in 2025 when the Danish Business Authority has made the necessary IT adjustments. At the time of this guide’s submission, the change has not yet been implemented. 

Further, as of 1 January 2025, the previously statutory conditions for shareholder loans were repealed, providing greater flexibility in the provision of loans. Going forward, shareholder loans can be provided without adhering to specific corporate law requirements. However, issuances of shareholder loans may not necessarily be attractive from a tax perspective, and management must remain mindful that the provisions of the Companies Act regarding self-financing still apply and that it remains management’s responsibility to ensure that the granting of the loan is prudent.

Additionally, the rules regarding offering of shares in private limited companies (anpartsselskaber) have been revised, allowing such companies to offer their shares to the public to a certain extent. Private limited companies now have the option of conducting equity crowdfunding in compliance with the EU Crowdfunding Regulation or other forms of limited public offering of shares. This can potentially ease private limited companies’ possibility of attracting necessary capital from investors, especially in the start-up phase.

Starting from 2025, large companies that exceed certain thresholds regarding revenue, balance sums and employees, as well as companies listed on a regulated market, must comply with the Corporate Sustainability Reporting Directive (CSRD), which mandates reporting on sustainability in accordance with the European Sustainability Reporting Standards (ESRS). The CSRD represents a significant regulatory development within ESG, requiring the regulated companies to disclose their sustainability efforts in a standardised manner. The CSRD will be implemented gradually for the entities subject to the Regulation, ending in 2029.

In addition, strengthened requirements for policies and target figures for the under-represented gender in State-owned public limited companies, listed companies and certain large limited liability companies have been adopted (see 2.5 Labour Law Regulations). Further developments in this area are expected in the coming years.

In 2023, the “fit and proper” rules were changed, codifying the practice of the Danish FSA as authorised to approve or reject a proposed member of the board of directors or executive board based on the suitability and honesty requirements. Furthermore, the change enables the possibility for the FSA to make approval of a management member conditional.

On 8 October 2024, the new EU Listing Act was adopted, introducing adjustments to the Market Abuse Regulation, the Prospectus Regulation, the Markets in Financial Instruments Directive and other EU legislation. These changes aim to make public markets more attractive to EU companies and facilitate access to capital for small and medium-sized enterprises (SMEs). Some parts of the Listing Act have already taken effect, while others will be implemented in 2026. The key changes in its implementation include:

• removal of the disclosure obligation in the MAR for intermediate steps in prolonged processes;
• an increase in the existing exemption from the prospectus rules for the admission to trading of shares below 20%, to 30%;
• the introduction of a short information document (a so-called EU follow-on prospectus) for companies that have been listed for more than 18 months for admissions and offers; and
• the possibility to increase the general exemption for small offers from EUR8 million to EUR12 million.

There have been no significant changes to the Danish takeover regime in the past 12 months. The latest changes in regulation of takeovers under Danish law were seen on 1 July 2020. However, The Danish FSA has recently submitted a new executive order on takeover bids for public consultation. The executive order is proposed to enter into force on 1 July 2025, and contains clarifications and modernisations to the rules on pricing in mandatory bids and the publication of public takeover bids as well as changes arising from the ESAP Regulation. At the time of this article’s submission, it is unclear what final form the executive order will take.

In respect of public takeovers, it is not uncommon for the bidder to have built up a stake in the target company prior to launching the offer. As long as the bidder is not in possession of inside information – which may be the case if the bidder has already been granted permission to carry out due diligence of the target – the bidder is free to buy shares and thereby increase its stake in the target.

The bidder should be aware that in both a voluntary and mandatory offer the bidder will be required to raise its offer price, if – during the offer period and up to six months after the expiry of this period – the bidder acquires shares in the target company at a higher price.

In addition, the price offered in a mandatory offer must, at a minimum, correspond to the highest price paid by the bidder for shares in the target company during the six preceding months. This rule is sometimes exploited by bidders, who deliberately use stakebuilding (at market price) to trigger a mandatory offer, which can then be carried out without a premium. Following the completion of the offer, the bidder will not be required to complete another mandatory offer irrespective of the outcome of the takeover. If the bidder had completed a voluntary offer and acquired between one third and 50% of the target, the bidder would be required to complete a mandatory offer following the voluntary offer.

Any natural or legal person directly or indirectly holding shares in a listed company must notify the company and the FSA when their holding of shares reaches, exceeds or falls below 5%, 10%, 15%, 20%, 25%, one third, 50%, two thirds or 90% of the voting rights or share capital of the company.

However, this does not apply to an issuer directly or indirectly holding own shares, who instead must publish a notice to this effect when its holding of own shares reaches, exceeds or falls below 5% or 10% of the voting rights or share capital of the company.

When building a stake in a target company, the bidder should consider the following aspects.

• Approval from authorities – a stakebuilding shareholder will have to consider general and special statutory requirements for approvals by regulatory authorities, including merger control requirements when acquiring direct or indirect control with (parts of) the target company and requirements for approval by the Danish FSA of acquisition of a substantial ownership in a financial business. Control may be obtained by acquisition of a qualified minority position, where it is possible for the acquirer to exercise (de facto) control due to the spread of the shares.
• Mandatory offer – if the bidder obtains, through stakebuilding, a controlling interest in the target company, an obligation to launch a mandatory offer is triggered (see 6.2 Mandatory Offer Threshold). Contrary to what applies to a voluntary offer, the main consequence of an obligation to launch a mandatory offer is that the price offered as a minimum must correspond to the highest price paid by the bidder for shares acquired in the target company during the six months preceding the approval of the takeover document.
• Reporting obligation – in its memorandum of association or in the articles of association, it is not possible for a company to introduce higher or lower reporting thresholds than those set out in 4.5 Filing/Reporting Obligations. A stakebuilding shareholder reaching, exceeding or falling below these thresholds must thus notify the company and the Danish FSA thereof.
• Voting limitations – a stakebuilding shareholder must consider any voting limitations that may apply to the target company, including voting ceilings and share classes with differentiated voting rights.

Under Danish law, dealings in derivatives are allowed, subject to reporting and disclosure obligations.

Any person directly or indirectly holding instruments giving unconditional rights to acquire shares and derivative financial instruments having an economic effect comparable to holding shares in a listed company must notify the company and the FSA when the holding of such instruments reaches, exceeds or falls below 5%, 10%, 15%, 20%, 25%, one third, 50%, two thirds or 90% of the voting rights or share capital of the company. Only long positions are taken into account when calculating voting rights. Long positions cannot be netted with short positions that have the same underlying issuer.

There is no general obligation to make known the purpose of an acquisition or any intention regarding control of the company.

A bidder must publish its intention to launch a voluntary offer as soon as possible following its decision to submit such offer.

In addition, the bidder is required, as soon as possible and no later than four weeks after the publication of a voluntary offer or the acquisition of a controlling interest, to publish a takeover document in which information on the bidder’s intentions with the target company and strategy with respect thereto must be included.

The obligation to launch a mandatory offer must be published as soon as possible after the bidder’s acquisition of a controlling interest.

Whether a transaction needs to be disclosed to the public under Danish law depends on whether a listed company is participating in the transaction.

Purely private M&A deals need not (as such) be disclosed to the public. However, legal requirements to register the change of ownership in the Danish Central Business Register and other filing requirements (eg, antitrust) will entail the transaction becoming public.

If a listed company participates in the transaction (either as the seller, the buyer or the target), information related to the transaction must be disclosed in accordance with the MAR if and when the information constitutes inside information. This will usually occur at some point during the negotiation phase, but the issuing company may be entitled to delay the disclosure until the deal has been signed, provided that the delay conditions set out in the MAR are fulfilled (eg, confidentiality must be ensured).

In the case of a takeover, the mere approach by a bidder to the listed company’s board may be regarded as inside information depending on the firmness of the approach (see 7.1 Making a Bid Public).

Market practice on the timing of disclosure is in line with the legal requirements set out in the MAR. It is often debated between practitioners as to when a transaction reaches a stage where information regarding the transaction becomes inside information, and whether disclosure of such information by the target can be delayed.

In larger private M&A deals, a full scope legal due diligence of the target will be customary. The legal due diligence may be in the form of vendor due diligence, which is topped up by the buyer, or by full buy-side due diligence.

As W&I insurance is usually taken out in connection with larger private M&A deals, the scope of the due diligence is likely to be affected by the underwriter’s requirements for the level and scope of due diligence.

In a public takeover situation, a (non-hostile) bidder will often be granted access to complete light legal due diligence, which focuses on material issues – eg, business-sensitive matters and/or litigation. A bidder may also have completed (outside-in) due diligence of all public matters relating to the target.

In connection with a public takeover, a standstill obligation will usually be demanded by the target’s board of directors. A bidder will generally accept a standstill obligation to facilitate discussions between the bidder and the target, and to mitigate the risk of insider trading.

A bidder is similarly interested in demanding exclusivity. If accepted by the target’s board of directors, it will usually – due to the board’s fiduciary duties to act in the company’s best interest – contain a carve-out for competing offers that present a better price.

In connection with a public takeover, it is permissible for the bidder and the target to document the agreed terms in a definitive agreement. This is usually seen in larger transactions, but it depends on the circumstances.

The length of the process relating to acquiring or selling a business in a private M&A transaction largely depends on the type of transaction and the size of the target.

Most structured processes in Denmark are completed within three to six months’ time, excluding preparatory work. However, as most structured processes require thorough preparation, including gathering information for a data room and completing legal and financial vendor due diligence processes, the full process may take as much as one year to complete.

A more simplified transaction may be completed in less than three months (which assumes a simultaneous signing/closing).

If the acquisition of a listed company is carried out as a takeover, the timing is affected by the Danish Takeover Order, which sets out that the offer period must be at least four weeks and no more than ten weeks. Any antitrust filings may extend the period for up to nine months from the publication of the offer document.

In public M&A transactions, a mandatory offer threshold under Danish law is reached when one or more persons acting in concert obtain controlling influence of the listed company.

Controlling influence is reached when the person or persons obtain ownership or control of one third of voting rights in a listed company, unless in extraordinary circumstances it can be established that this ownership or control of voting rights does not constitute controlling influence of the listed company.

Furthermore, controlling influence is obtained if the person or persons have the ability to control one third of the voting rights in the company via an agreement with other shareholders, or if they have the power to appoint the majority of the board of directors.

In a private company setting, the same mandatory offer threshold does not exist. However, in a situation where a single shareholder holds more than 90% of the shares and voting rights of a limited liability company, any minority shareholder will be entitled to demand a redemption of its shares by the majority shareholder.

In private M&A transactions, cash is the primary method of consideration, although re-investment schemes are often seen as a way to bridge the financing. Earn-out provisions or indemnifications (in the case of a specific risk) may be used if the parties cannot agree on the value of a target. Although often discussed, earn-out provisions are not commonly incorporated.

In a public takeover scenario, the primary method of consideration is cash. A bidder is entitled to offer either cash or shares, or a combination thereof, except in the case of a mandatory offer, which must include a cash alternative if shares offered are not liquid shares in a company listed on a regulated market, or if the bidder has acquired at least 5% against cash within six months prior to the offer.

A shareholder holding more than 90% of the shares and the votes in a company will be entitled to complete a squeeze-out of the remaining shareholders. Such squeeze-out must be completed by offering cash. Similarly, each of the minority shareholders also has the right to demand redemption of their shares by the shareholder holding more than 90% of the shares and the votes in a company.

While a mandatory offer must be unconditional, voluntary offers may be conditional as long as the conditions are not within the control of the bidder. Common conditions are, for instance, a minimum acceptance threshold of more than 90% (due to the squeeze-out option) and regulatory conditions.

If a bidder in a voluntary offer acquires between one third and 50% of the target, the bidder is required to complete a mandatory offer following the voluntary offer. Consequently, an acceptance threshold above 50% will usually be included as a condition in a voluntary offer.

It is very common for the minimum acceptance condition to be set at more than 90% of the shares and voting rights, as this is the threshold for effecting a redemption of the remaining minority shareholders under the Danish Companies Act. Similarly, a company may be delisted if a shareholder secures more than 90% of the share capital, allowing them to compulsorily redeem the remaining shares under applicable company law. Alternatively, delisting can occur if a resolution is passed at a general meeting with at least 90% of the votes cast and at least 90% of the share capital represented.

Other relevant thresholds are two thirds of the shares and voting rights, or just above 50%. A total of two thirds of the shares and voting rights is sufficient to complete most amendments of the articles of association and to effect capital increases or mergers. A simple majority of shares and voting rights is sufficient to control most decisions at the general meeting, including the appointment of directors.

Neither a mandatory nor a voluntary offer may be conditional on the bidder obtaining financing. Prior to the announcement of a mandatory or a voluntary offer, it must be ensured that the bidder can fully meet any requirement regarding consideration in cash. Furthermore, the bidder must also have taken all reasonable measures to ensure that any other form of consideration (eg, share consideration) can be paid.

The most common deal security measure used by bidders in public M&A transactions is non-solicitation provisions and matching rights. Break-up fees are legally permissible (if reasonable) but are not commonly used in the Danish market and are often rejected by targets with reference to the board’s fiduciary duties.

Material adverse change (MAC) conditions are sometimes used, and gap covenants have been tailored to protect against pandemic risk in an interim period.

There have been no changes in the regulatory environment leading to changes in interim periods.

In private M&A transactions, it is common for the shareholders to enter into a shareholders’ agreement where additional terms can be arranged, including rights to appoint members of the board of directors and to veto rights concerning certain proposals put forward at the general meeting. It is, however, important to note that under Danish law a shareholders’ agreement is generally not binding on the company. A breach of contract must therefore be handled separately between the shareholders.

In a listed company, it is uncommon for certain shareholders to be provided with additional governance rights. It is possible to build special governance rights into the articles of association, but this is rarely seen outside the context of restructurings.

Shareholders have the opportunity to vote by proxy in Denmark, and such a right cannot be restricted in a limited liability company. If a shareholder wishes to vote by proxy, a dated power of attorney must be provided in writing. The power of attorney can be given to a specific person or to the holder of the power of attorney – it does not need to be limited in time and can be withdrawn at any time.

See 6.9 Voting by Proxy.

In connection with a public takeover, bidders may obtain irrevocable commitments from larger shareholders as an alternative to stakebuilding.

Depending on the shareholder structure and the transaction, the bidder may enter into irrevocable commitments prior to contacting the target’s board of directors in order to put pressure on the board. Bidders sometimes also enter into irrevocable commitments following discussions with the board, and in such cases with the board’s blessing.

Irrevocable commitments will usually contain an “out”, in case of competing offers that present a better price.

Private M&A transactions are not required to be made public, but are often disclosed by the parties involved through a press release, either at signing or at closing. As previously mentioned, antitrust filing, registration of ownership in the public register and other corporate actions will preclude the option of keeping the transaction secret.

Inside Information

As mentioned in 5.1 Requirement to Disclose a Deal, a transaction may be regarded as inside information if a listed company participates in the transaction (either as the seller, the buyer or the target). To the extent that the transaction constitutes inside information, disclosure of the transaction must be made no later than at signing and cannot be postponed based on any required regulatory approvals.

In the case of a public takeover, the mere approach by a bidder to the listed company’s board may be regarded as inside information depending on the firmness of the approach. In a recent ruling relating to inside information in connection with a takeover, the FSA stated that even an indicative offer should be considered sufficiently serious to be deemed inside information. In the present case, the indicative offer was made by a consortium of a global financial service group and three large Danish pension funds, and was made after a thorough examination of the company and the Danish market. In addition, the indicative offer was already fully financed.

Public Takeover

For public takeovers, the Danish Takeover Order stipulates that a takeover offer must be made public. A bidder launching a voluntary offer must disclose its intention to do so as soon as possible following the bidder’s decision to submit such offer. In the case of a mandatory offer, the bidder must disclose the obligation to launch a mandatory offer as soon as possible after the bidder’s acquisition of a controlling interest (see 6.1 Length of Process for Acquisition/Sale for the definition of “controlling interest”).

As regards the manner in which the announcement must be made, the Danish Takeover Order prescribes that this must be by means of a notice which, via electronic media, reaches the public in the countries where the target company’s shares are listed on a regulated market.

In the event of an issuance of shares in an M&A transaction, the following types of disclosure are relevant, depending on the type of transaction.

• Mandatory offer – in a merger involving listed companies, the bidder must launch a mandatory offer if the issuance of shares results in an acquisition of a controlling interest in a listed company. In such event, the bidder must disclose the obligation to launch a mandatory offer.
• Prospectus – for public offers exceeding certain minimum thresholds, there is an obligation to publish a prospectus. However, this obligation does not apply to securities offered, allotted or to be allotted in connection with a takeover, merger or demerger, provided that a document containing information about the transaction and its consequences for the issuer is made available to the public.
• Corporate law merger documentation – in the event of a merger, the Danish Business Authority must receive a drawn-up merger plan and a declaration by valuation experts on the creditors’ position or, if such documents have been deselected, information surrounding this. Upon receiving such notification, the Danish Business Authority will publish this.

In private and public M&A transactions, the bidder is not required to disclose or produce financial statements for the bidder.

However, in public M&A transactions the bidder is required – as soon as possible and no later than four weeks after the publication of a voluntary offer or the acquisition of a controlling interest – to publish an offer document which must include information on the target company’s current activity and key figures from the most recently published financial statement of the target company, as well as the most recently published financial expectations for the target company in the current financial year.

Private M&A Transactions

In private M&A transactions, no transaction documents are required to be disclosed in full.

Public M&A Transactions

In public M&A transactions, the takeover document and a statement from the target company’s board of directors containing the board of directors’ reasoned position on the offer must be disclosed. No other transaction documents need to be disclosed in full. However, as the takeover document must contain information on the parties, the offer price, the consideration, any conditions (only in a voluntary offer) and applicable law, etc, certain main terms of other transaction documents will be included as such in the takeover document.

The duties of the directors are primarily owed to the shareholders of the company as a whole. This also entails that the management is not allowed to take any action that is likely to provide certain shareholders or others with undue advantages over other shareholders or the company.

In a public takeover, it is not common for the board of directors to establish special or ad hoc committees.

Corporate mergers between one or more listed companies are rarely seen, but in such cases it is common to establish a special committee to:

• negotiate the deal and plan for integration;
• assess separation issues and synergies; and/or
• handle conflicts of interest.

Case law in recent years has strongly indicated the application of the business judgement rule under Danish Law. In cases concerning management liability, the Danish Supreme Court has stated that the court should be cautious regarding holding management liable when a business judgement has been made. This caution presupposes that the management was acting solely in the interest of the company and that the business judgement was made on a well-informed basis.

Although there is no case law concerning the business judgement rule in takeover situations, it is presumed that the same caution would apply under those circumstances.

Any transaction – private or public – will generally require external legal involvement. Financial advisers will usually also be involved together with an accountant.

In public M&A transactions, it is common for the management of the target to retain independent financial advisers to issue fairness opinions and provide support concerning valuation issues.

The principles of conflict of interest among directors and managers are well established, and are regulated in the Danish Companies Act.

Under the Danish Companies Act, no member of the board of directors or the executive board may take part in the process concerning an agreement between the limited liability company and the member themselves, or in discussions regarding lawsuits against the member themselves. Furthermore, a member is not allowed to participate in discussions regarding agreements between the limited liability company and any third party, or in discussions about lawsuits against a third party, if the member has a material interest which may conflict with the interest of the company.

While the rules of conflict of interest do not apply to shareholders, the members of the management appointed by a majority shareholder may be in a conflict of interest in situations where the interests of the limited liability company and the majority shareholder are in conflict. The consequences are that a member of the management may be obliged to withdraw from the board in consideration of certain transactions.

Advisers of the company will usually ensure that conflict considerations are made prior to their agreeing to be retained in the first place.

Hostile tender offers are permitted in Denmark, but they are not common since bids usually follow a formalised auction process and (friendly) negotiations with the board of directors of the target company.

Use of defensive measures by the directors is allowed under Danish law. Subject to the duties of the management, the directors must, however, be aware of potential risks of becoming liable when utilising aggressive measures, such as when issuing new shares to a friendly third party or using “poison pills”. Other and less aggressive ways of using defensive measures include denying a due diligence review and recommending that shareholders decline the tender offer.

As hostile tender offers are generally quite uncommon in Denmark, so too are these measures.

In terms of reactive measures, the most common response to a hostile tender offer is for the management to search the market for competing bidders and to create a formalised auction process in an effort to ensure price competition.

It is also not uncommon for companies to have precautionary measures incorporated into the articles of association (eg, an authorisation for the board of directors to make a directed share issue); and, especially in the financial sector, it is common for voting rights ceilings to be included. It is also fairly common in larger, formerly family-owned businesses to have separated classes of shares. This way, B shares are usually listed on a regulated market, while A shares with stronger voting rights attached remain in the hands of the original owners.

When enacting defensive measures, directors must have due regard to the corporate benefit doctrine, according to which any action taken by the directors must be in the interest of the company (ie, generally the collective interest of the shareholders in the company). That said, there are no specific rules governing directors’ duties in relation to defensive measures.

In practice, the board of directors will often consult strategically important shareholders to ensure that they support the initiatives taken by the board of directors. However, this must be done in accordance with the duty to not take any action that is clearly capable of providing certain shareholders or others with an undue advantage over other shareholders or the limited liability company. Certain defensive measures must be approved by the shareholders at a general meeting.

Naturally, the potential responsibility of the board of directors is greater if it actively seeks to prevent a takeover offer being made or implemented than if it refrains from actively supporting the takeover offer.

As long as the directors work loyally in the best interest of the shareholders and the company as a whole, directors are deemed to have a fairly broad ability to oppose business combinations.

In the context of public takeover offers, whether to deny or accept an offer is primarily left to the shareholders. In practice, however, directors are left this broad ability to assess whether an offer is in the best interest of the shareholders and the company, since a bidder, if they are met with resistance from the management, will have the option to approach the shareholders directly. The board of directors will usually hire financial advisers in order to assess the offer and, optionally, formalise an auction process to create price competition.

Litigation in connection with public M&A deals is very uncommon in Denmark, and Danish private M&A deals are generally subject to arbitration clauses, due to the confidential nature of such proceedings. Therefore, very little public information is available in respect of M&A litigation.

See 3.1 Significant Court Decisions or Legal Developments regarding the “Gram Equipment case” from 2023.

Litigation related to private M&A will, in general, relate to breach of warranties or purchase price calculations in closing account deals – ie, post-closing.

The authors are not aware of any public disputes between parties with pending transactions in recent years. It should be noted that such cases are usually subject to arbitration clauses and are thus non-public; see 10.1 Frequency of Litigation.

Shareholder activism is seen more and more in the Danish market, particularly in respect of larger companies, and generally in sectors such as pharma, banking and energy.

Shareholder activism in the Danish market is primarily seen taking place at annual general meetings of listed companies, where shareholders ask critical questions and challenge management decisions.

Danish pension funds and international and national shareholder organisations are the most active shareholders in the Danish market. Recently, the focus of such shareholders has been tax transparency, ESG matters in general, shareholder value and corporate strategy.

When shareholder activism is seen in Denmark, it is mostly related to the composition of the management, ESG and compliance matters, remuneration and observance of disclosure obligations.

Activists rarely try to interfere with the completion of announced transactions in Denmark.