The M&A market today shows a clear improvement compared to 12 months ago, although the development during 2025 was not linear. After a subdued first quarter, transaction activity accelerated during the second and fourth quarters, resulting in a marked year-on-year increase in overall deal volumes in Sweden.

Globally, M&A activity strengthened during 2025 and approached historically high levels. The year was characterised by a renewed focus on scale and a shift towards larger strategic transactions, supported by gradually improving financing conditions. At the same time, regulatory scrutiny, geopolitical development and national security considerations continued to influence deal timelines and structures.

In Sweden, transaction activity rebounded notably during the year. While the first quarter reflected continued caution in the market, the second quarter recorded one of the highest quarterly deal volumes in recent years, and the final quarter confirmed a sustained recovery trend. Private equity participation remained significant throughout the year, although the share of sponsor-led transactions declined towards year-end compared to 2024, primarily due to fewer platform investments, while add-on acquisitions and exit preparations remained active. Cross-border activity increased during 2025. Domestic buyers continue to play a key role in the Swedish market; however, outbound transactions also gained importance.

In parallel with the recovery in M&A activity, global IPO markets showed clear signs of stabilisation during 2025 after several years of subdued activity. Equity markets proved resilient, supported in particularly by strong performance in technology and AI-related sectors, although volatility and valuation concerns remained present throughout the year. Investor selectivity increased markedly, with a clear preference for companies demonstrating profitability pathways, strong governance and sustainable cash flows. Larger high-quality transactions were generally well received, while more speculative listings faced greater challenges.

The improving deal landscape is also reflected in shifting market dynamics and strategic priorities among buyers. Scale and corporate focus have become increasingly important value drivers, particularly in sectors undergoing structural transformation. Companies are increasingly pursuing acquisitions to accelerate digital transformation, strengthen AI capabilities and enhance sustainability efforts. At the same time, industries with high fixed costs – such as energy, financial services and telecommunications – have seen a rise in large-scale consolidation deals.

Looking ahead, M&A activity in Sweden is expected to remain robust as financing conditions have stabilised and IPO pipelines have strengthened. However, regulatory developments and broader economic uncertainties will remain key factors shaping the pace and structure of transactions.

In 2025, scope deals accounted for 60% of large transactions, marking a record year for revenue-driven and capability-enhancing M&A. Valuation gaps and earnings visibility continued to shape deal structuring, and, although credit market liquidity improved compared to 2024, structured solutions remained common to bridge buyer and seller expectations. Minority stake sales, continuation vehicles and other structured exit mechanisms gained further traction globally, while in Sweden narrowing credit spreads supported transaction financing, particularly towards year-end.

According to the latest CMS M&A study, earn-out mechanisms increased in the Nordic region, including Sweden, and vendor loans remain commonly used to bridge valuation gaps amidst continued earnings uncertainty. Although credit market conditions improved during 2025, structured solutions continue to be utilised to secure full acquisition financing. In the property sector, narrowing credit spreads and increased issuance volumes, approaching 2021 levels, indicate improved funding conditions and enhanced access to bond markets. An updated CMS M&A study is expected during spring 2026, which may provide further insight into whether these structural features have continued into 2025.

According to the CMS M&A study, the locked-box model remains the preferred purchase price mechanism, offering certainty for sellers. It is particularly suited to transactions with short signing-to-closing period or stable earnings, while combinations with earn-out structures are also common where future performance remains uncertain.

Over the past 12 months, AI has continued to shape M&A activity, both as a strategic investment focus and as a tool to enhance efficiency in sourcing, screening and overall due diligence. In addition, there are some signs that the use of generative AI can reduce effort, time and costs, underlining its potential to optimise M&A activities.

During the year, AI adoption in M&A more than doubled, to 45% of practitioners. Deal makers have in some cases walked away from transactions due to the anticipated impact of AI on the target’s business model, demonstrating that AI considerations increasingly influence substantive investment decisions. On the other hand, questions regarding allocation of responsibility for outcomes produced in whole or in part by AI between the creator and the user of the AI, as well as safeguarding of confidential information when using AI, are still highly debated in Sweden.

Private equity remained a significant participant in Swedish M&A during 2025, although sponsor activity fluctuated over the year. Significant dry powder and maturing portfolios are expected to sustain sponsor activity going forward. The use of warranty and indemnity (W&I) insurances continued to play an important role. According to the latest CMS M&A study, W&I insurance was used in 13% of Nordic transactions, representing a 5% increase during 2024. It would be surprising were these figures not to rise once the updated CMS M&A study is released, as the authors note that today W&I insurances are more commonly discussed within our client base. 

Private capital has become increasingly prominent in global M&A and is deployed across the risk-return spectrum, including minority investments, private credit and other structured solutions, underscoring its growing role in both acquisitions and strategic investments.

In Sweden, several industries experienced significant M&A activity over the past 12 months. Throughout 2025, advanced manufacturing and mobility, and technology, media and telecommunications, remained among the most active sectors. Consumer-related transactions gained momentum during the middle part of the year and continued to represent a meaningful share of the overall activity.

In the final quarter of 2025, transactions in Sweden were mainly concentrated in the following industries:

• advanced manufacturing and mobility, representing 37%;
• technology, media and telecommunications, representing 23%; and
• consumer products, representing 16%.

Acquisitions of private companies are generally carried out in one of two ways: through a share transfer or an asset transfer. Both methods offer distinct advantages and are formalised through a purchase agreement, the structure of which varies depending on the complexity of the transaction.

In an asset transfer, the parties can agree on specific assets and liabilities to be included, which in turn allows for the exclusion of certain liabilities or problematic assets as well as the possibility to avoid carrying on certain company-specific history pertaining to the selling company.

In contrast, a share transfer involves the transfer of the entire company, including all assets and liabilities. This method can be beneficial as it enables the buyer to acquire an established business with an existing brand, business relationships and market presence.

Two or more companies may also merge, with the transferring company being absorbed by an acquiring company; however, merger structures are rarely used to acquire external targets in Sweden. The choice of acquisition method is often tax-driven, where generally a share sale could be treated as tax-favourable from a seller’s perspective.

In public company acquisitions, the predominant method is a public takeover bid, which may be voluntary or mandatory and is announced through an offer document. Under Swedish law, if the offeror acquires more than 90% of the shares and voting rights, the offeror has the right to squeeze out the remaining minority shareholders, who may likewise require a corresponding buy-out at that threshold.

In Sweden, the primary regulators for M&A activity are the following.

• The Swedish Securities Council (Aktiemarknadsnämnden) – works to promote good practices on the Swedish stock market through statements, advice and information. The Council is part of the self-regulation system on the stock market.
• The Swedish Financial Supervisory Authority (Finansinspektionen) – is responsible for granting licences, creating regulations and overseeing the financial market.
• The Swedish Corporate Governance Board (Kollegiet för svensk bolagsstyrning) – shall foster the positive development of Swedish corporate governance and ensure that Sweden maintains a relevant, effective and well-functioning corporate governance code for listed companies.
• The Swedish Companies Registration Office (Bolagsverket) – is not a regulator but a registration authority to which changes in company structures, such as the board of directors, must be notified to become effective. Information filed with the authority becomes publicly available – for example, minutes from general meetings filed to register company amendments may be retrieved by the public.
• The Swedish Securities Market Self-Regulation Committee (Aktiemarknadens självregleringskommitté) – has issued takeover rules for Nasdaq Stockholm and Nordic Growth Market NGM as well as for Nasdaq First North, Nordic MTF and Spotlight Stock Market trading platforms. Issuers whose shares or other financial instruments are listed on a regulated market or a multilateral trading facility (MTF) must comply with the rules and requirements applicable to the specific market on which their securities are listed or traded. The Securities Council is also responsible for interpreting and assessing exemption requests regarding these rules.
• The Inspectorate of Strategic Products (Inspektionen för strategiska produkter) – controls the exportation of military equipment and dual-use products, and is the Swedish screening authority for foreign direct investments.
• The Swedish Competition Authority (Konkurrensverket) – monitors corporate acquisitions to ensure that companies comply with competition law. Acquisitions must be notified to the Swedish Competition Authority if the annual turnovers of the involved companies exceed certain threshold values set by the Competition Act, as outlined further in 2.4 Antitrust Regulations.

In 2023, new legislation regarding the review of foreign direct investments came into effect. The legislation aims to prevent foreign investments in Swedish activities that are deemed sensitive and potentially harmful to Sweden’s national security or public order and safety. It applies when a foreign investor intends to invest in operations within critical sectors, such as (but not limited to):

• security and defence;
• energy;
• telecommunications;
• IT infrastructure;
• transportation;
• healthcare; and
• research with security implications.

Investments in these sectors are subject to mandatory notification to the Swedish Inspectorate of Strategic Products (ISP) prior to completion. The regime has a broad scope, and most investments are notifiable, although the vast majority are cleared without action. ISP may review, prohibit or impose conditions on a transaction deemed to pose a security risk, meaning that notifiable transactions cannot be completed without prior clearance.

ISP has an initial 25 working days to decide whether to leave the transaction without action or initiate an in-depth review. If an in-depth review is opened, the authority has an additional three months to approve or prohibit the investment. The regime has been criticised for its wide scope and calls have been made for refinement to limit notifications to genuinely sensitive activities. Notwithstanding such criticism, the practical scope of the regime was broadened and concretised through updated regulations issued by the Swedish Civil Contingencies Agency (MSB), which entered into force on 1 October 2024. Furthermore, additional amendments were circulated for consultation proposing a further expansion of the regime’s substantive scope, with the consultation period concluding on 6 February 2026. The proposal seeks to extend the categories of activities considered sensitive and thereby increase the range of transactions subject to mandatory notification.

Both Swedish and EU competition laws are relevant considerations in corporate acquisitions in Sweden. The Swedish Competition Act contains regulations for the review of certain M&A, referred to as “concentrations”. According to the Competition Act, a concentration should be prohibited if it significantly impedes effective competition within Sweden as a whole or a substantial part of it. If less restrictive measures are sufficient to address the harmful effects, these may be considered instead of an outright prohibition. A concentration must be notified to the Swedish Competition Authority if the combined turnover of the involved companies in Sweden in the previous fiscal year exceeds SEK1 billion and at least two of the companies involved had a turnover in Sweden exceeding SEK200 million each in the previous fiscal year.

Transactions meeting the EU thresholds and having a “community dimension”, including combined EU turnover exceeding EUR2.5 billion across several member states, fall within the exclusive jurisdiction of the European Commission and cannot be reviewed by national authorities. If the EU thresholds are met but the competitive effects are primarily national, the parties may request a referral to the national competition authority – for example, the Swedish one.

Empirical data indicates that most notified transactions continue to be cleared without conditions. Market data from recent years shows that approximately 95% of transactions notified for antitrust clearance over the past five years were cleared unconditionally following Phase 1 review, while prohibitions remain exceptional.

At the same time, authorities are increasingly applying broader theories of harm. The report highlights cases such as Booking/eTraveli and Adobe/Figma, illustrating a growing emphasis on ecosystem effects and innovation-based competition concerns rather than pure traditional market share analysis.

In Sweden, employees are protected in asset transfers under the Swedish Employment Protection Act (1976:580). Where a business or part thereof is transferred, all rights and obligations under the relevant employment contracts automatically pass to the acquirer, and the transfer itself cannot constitute grounds for dismissal. If the transferor was bound by a collective bargaining agreement, the acquirer is generally required to adhere to it. These rules primarily apply to asset transfers, as employees change employer, whereas in share transfers the employer remains the same. However, certain obligations, such as trade union notification requirements, may also arise in share transfers.

Swedish labour legislation contains provisions on negotiations between employers or employers’ organisations on the one hand and employees’ organisations on the other before (for example) the employer takes a decision on a major change in its activities. An employer’s obligation to negotiate before a decision on a major change in its activities is not directed at individual employees, but is directed at trade unions that shall safeguard the employees’ rights and interests. The obligation to negotiate must be fulfilled on the employer’s own initiative with the trade union to which it is bound by a collective agreement.

Restrictive covenants, including non-compete and non-solicitation clauses, are common in senior management contracts, but are subject to statutory limits of reasonableness. Where such clauses are deemed excessively restrictive, courts may declare them wholly invalid, notwithstanding the fundamental principle that contracts are to be enforced as agreed. The case law of the Swedish Labour Court demonstrates that the court takes a restrictive approach to non-competition clauses in employment contracts. When assessing the reasonableness of such a clause, the Labour Court conducts a comprehensive assessment. This assessment takes into account:

• the extent to which the employer has a legitimate interest in imposing the restriction;
• the extent to which the non-competition clause restricts the employee’s ability to engage in professional activities either as an employee or as a self-employed individual; and
• whether the employee receives compensation during the period of restriction or whether the employee’s salary and terms of employment have been determined in light of the restrictions imposed by the clause.

Other factors may also be considered, such as the employee’s position and length of employment, and whether the clause was the subject of genuine negotiations between the parties.

Under the Security Protection Act (2018:585), operators engaged in activities of significance to Sweden’s national security, or subject to international security protection commitments, must conduct a security protection assessment and suitability review, and consult the supervisory authority prior to transferring security-sensitive operations. Security protection includes safeguarding such operations and classified information against espionage, sabotage, terrorism and related threats.

The supervisory authority, ISP, may order compliance measures and prohibit a transfer deemed inappropriate from a security perspective. Any transfer carried out in violation of such a prohibition is invalid.

As previously mentioned, ISP is also responsible for reviewing and deciding on foreign direct investments in protected activities (see 2.3 Restrictions on Foreign Investments). During 2025, notifications increased by 57% compared to the preceding year, reaching 1,987 filings, of which only two resulted in prohibition decisions. The vast majority of notifications concerned the foreign direct investment regime rather than the Security Protection Act.

As most M&A disputes are subject to arbitration, and since decisions are generally kept confidential, there have not been many significant court decisions in the last three years relating to pure M&A matters.

In 2025, the council confirmed that underwriting and guarantee undertakings in rights issues may trigger mandatory bid obligations. However, consistent with established practice, dispensations may be granted where the guarantor is only allocated shares remaining after other shareholders have exercised their rights, provided that shareholders are informed of the maximum potential voting stake and the transaction is approved by a two-thirds majority of disinterested shareholders. In addition, practical developments in regulatory enforcement have materially affected transaction execution. Regulatory intervention has become a key determinant of deal structure and timing, even in the absence of major judicial precedents.

Swedish takeover law is primarily based on the Takeover Directive (2004/25/EC). The key regulations can be found in the following:

• the Securities Market Act (Lag (2007:528) om värdepappersmarknaden); and
• the Act on Public Takeovers (Lag (2006:451) om offentliga uppköpserbjudanden på aktiemarknaden); and
• the Takeover Rules for Regulated Markets (Takeover-regler för reglerade marknader), which is a part of the self-regulation.

Nasdaq Stockholm and Nordic Growth Market (NGM) have issued identical takeover rules for their regulated markets and maintain their own disciplinary committees. Both have delegated to the Swedish Securities Council (Aktiemarknadsnämnden) the task of interpretation of the Corporate Governance Code and exemption assessments.

The Swedish Securities Market Self-Regulation Committee (Aktiemarknadens självregleringskommitté) has issued takeover rules applicable to multilateral trading facilities (MTFs), including Nasdaq First North, Nordic SME and Spotlight. While these rules are substantively aligned with the takeover rules applicable to regulated markets, their legal basis differs materially. On regulated markets, the takeover rules operate within the statutory framework of the Public Takeover Bids Act (LUA), and offerors are required to undertake vis-à-vis the exchange to comply with the rules and accept potential sanctions. By contrast, the takeover rules applicable to MTFs are based on self-regulation, lack statutory underpinning and do not require any such undertaking, resulting in materially different enforcement mechanisms.

This distinction has had practical consequences. In CodeMill and Integrum, both listed on Nasdaq First North, the Council found conduct contrary to takeover rules and good market practice, but no sanctions could be imposed as the applicable rules rest on self-regulation rather than a statutory undertaking. In NAXS, listed on Nasdaq Stockholm, the mandatory bid obligation under LUA was not formally triggered, although the Council held that good market practice nevertheless required an offer. As no formal breach of the statutory framework occurred, sanctions were likewise unavailable. Taken together, these cases demonstrate that enforcement may differ depending on listing venue, despite substantive alignment in the underlying rules.

This distinction is of particular importance to foreign bidders, who may assume that takeover regulation and sanction mechanisms operate identically across regulated markets and MTFs in Sweden. The cases also highlight an enforcement gap and may prompt discussion as to whether future regulatory developments could also lead to more binding or sanction-backed mechanisms in respect of MTF takeover rules.

The Swedish Corporate Governance Board issues the Swedish Corporate Governance Code, last updated on 1 January 2024; the Code supplements legislation and applies on a comply-or-explain basis.

No significant structural changes to Swedish takeover legislation were introduced during the past year. Takeover rules for trading platforms issued by the Swedish Securities Market Self-Regulation Committee with effect from 1 July 2025 primarily codify established practice and do not entail any material deviation from the rules applicable as from 1 January 2024. However, the revised rules include a limited substantive classification regarding the interaction between the takeover rules and the EU Prospectus Regulation in share-for-share offers, in particular as regards the application of the prospectus exemption under Article 1(4)(da) of the EU Prospectus Regulation.

At EU level, capital markets reforms adopted in 2024 under the EU Listing Package began to apply from 2025, amending the Prospectus Regulation and the Market Abuse Regulation (including Article 17) to introduce more proportionate disclosure requirements and reduce administrative burdens for listed issuers. Separately, Corporate Sustainability Reporting Directive (CSRD) reporting for the 2024 financial year (published during 2025) has expanded sustainability disclosure requirements under the European Sustainability Reporting Standards (ESRS), increasing compliance complexity in transaction planning, due diligence and disclosure assessments.

For tactical reasons, offerors may choose to acquire shares in the target company before approaching its management or shareholders or launching a formal offer. Although stakebuilding is permitted in Sweden, it is subject to certain restrictions and disclosure requirements. Offerors must also ensure that they do not have undisclosed inside information beyond their own offer plans.

Additionally, stakebuilding may influence both the value and structure of a subsequent offer and could trigger disclosure requirements or mandatory offer obligations. To ensure equal treatment of shareholders, takeover rules require that the terms of a public takeover offer cannot be less favourable than the terms of share acquisitions made by the offeror within six months before, during or after the offer period.

In Sweden, the material shareholding disclosure thresholds and filing obligations are set out in Chapter 4 of the Swedish Financial Instruments Trading Act (1991:980), which implements the Transparency Directive (2004/109/EC). These rules apply to shares admitted to trading on a regulated market for which Sweden is the home member state.

The applicable disclosure thresholds are 5%, 10%, 15%, 20%, 25%, one third, 50%, two thirds and 90% of the share capital or voting rights. These thresholds are triggered by acquisitions, disposals, share lending, the return of borrowed shares or other relevant events.

A shareholder who reaches, exceeds or falls below one of the applicable disclosure thresholds must notify both the Swedish Financial Supervisory Authority and the company concerned.

The disclosure obligations also apply to share-related instruments, such as depositary receipts with voting rights, non-standard options, derivatives, warrants, borrowed shares and convertible instruments.

The reporting thresholds are set by law, and as such they cannot be altered through provisions in the articles of association. Additionally, there are no specific rules that directly address barriers to stakebuilding, other than potential restrictions concerning access to inside information, reporting obligations and mandatory offer requirements.

Dealings in derivatives are allowed under Swedish law.

The European Market Infrastructure Regulation (EMIR) sets out rules for derivatives trading. It requires that all derivatives contracts be reported to a trade repository, with the responsibility for reporting resting with the counterparties. However, counterparties may delegate this obligation to a third party.

EMIR also sets out requirements for the mandatory clearing of certain over-the-counter (OTC) derivatives through a central counterparty (CCP). The European Securities and Markets Authority (ESMA) provides guidance on which derivatives are subject to this clearing obligation.

Exemptions may be granted to counterparties within the same group and, during a transitional period, to certain pension schemes.

Derivatives and other financial instruments conferring rights to underlying shares listed on a regulated market are subject to the same disclosure thresholds and reporting obligations as shares (see 4.2 Material Shareholding Disclosure Threshold).

As mentioned previously, EMIR has introduced reporting requirements to ensure transparency in derivatives markets. Therefore, all trades in OTC and exchange-traded derivatives must be cleared and reported to the ESMA register in accordance with EMIR.

In Sweden, shareholders are not generally required to disclose their intentions when acquiring shares. However, disclosure obligations apply in certain cases:

• ownership disclosure obligations – disclosure is required when surpassing ownership thresholds (see 4.2 Material Shareholding Disclosure Threshold);
• mandatory offer rule – exceeding 30% of voting rights triggers a mandatory offer, revealing control intentions (see 6.2 Mandatory Offer Threshold); and
• takeover offers – a full public offer requires disclosure of motives and expected consequences.

Under Swedish law, the requirement to disclose a transaction to the public depends on whether a listed company is involved.

Private M&A transactions are not subject to public disclosure. However, regulatory obligations, such as the need to register changes in ultimate beneficial owners with the Swedish Companies Registration Office or to comply with competition law, could result in information relating to the transaction becoming publicly accessible.

Inside Information

According to the Market Abuse Regulation (MAR), the general rule is that an issuer must disclose inside information that directly concerns it to the public as soon as possible.

The issuer must ensure that the information is made public in a manner that allows for rapid access and enables the public to assess it fully, accurately and in a timely manner. Where applicable, the disclosure should also be made through the officially appointed mechanism referred to in Article 21 of Directive 2004/109/EC of the European Parliament and the Council.

In the case of inside information disclosure, an issuer may not combine it with marketing activities, and all publicly disclosed inside information must be published and maintained on the issuer’s website for at least five years.

Under the new EU Listing Act (EU) 2024/2809, the disclosure obligations regarding inside information under Article 17 of the MAR have been revised in certain areas (see 3.2 Significant Changes to Takeover Law).

Public Takeover

In a takeover situation, the companies involved are also required to disclose certain information to the public (see 7.1 Making a Bid Public).

Owing to the strict regulation in the MAR requiring inside information to be made public as soon as possible, market practice on timing of disclosure does not differ from legal requirements.

However, the issuer rulebooks of Nasdaq Stockholm and Nordic Growth Market set out specific rules for disclosure of information not deemed as inside information but which is still of necessity for the shareholders and investors, such as a notice of summoning to a general meeting in an issuer.

In Sweden, it is common to conduct financial and legal due diligence in a negotiated business combination. Financial due diligence primarily focuses on assessing the financial health and stability of a business unit during an acquisition, with accurate financial information being crucial for decision-making. This process typically involves a thorough review of the target company’s financial statements, assets, liabilities, cash flow, debt levels and future profit forecasts. Legal due diligence, conducted to ensure compliance with applicable laws and regulations, often involves the examination of employment contracts, agreements, litigation history, intellectual property rights and other legal matters.

Additionally, operational, tax and commercial due diligence are also common practices during the acquisition process, each focusing on specific aspects of the target company’s operations, tax obligations and market positioning.

In relation to public offers, the possibility to conduct a due diligence process is limited by the target’s restriction on sharing inside information without making it publicly available to the market.

Neither standstills nor exclusivity are common in public acquisitions. However, in acquisitions of private companies an exclusivity period is often agreed upon between the acquirer and the shareholder(s) of the target at some point of the acquisition. Such exclusivity can be agreed either at an early stage in the process (allowing a sole potential acquirer to perform their due diligence undisturbed by competing offers) or at a later stage following the potential acquirers having presented a preferred bid in an auction process. 

As no share transfer agreement is entered into in a public takeover, it is not common for tender offer terms and conditions to be documented in a definitive agreement. The bidder usually submits either an unconditional binding offer or an offer that is subject to certain conditions being met. Such conditional offer typically becomes binding immediately once the conditions set out are met. The bidder can include reservations in the offer; if the conditions are not fulfilled, the bidder can waive any condition presented, thus making the offer binding.

The process of acquiring or selling a company in Sweden typically takes one to six months from the start to the signing of the share purchase agreement. However, the timeframe varies significantly, and many transactions take considerably longer. The timeframe is (among other factors) affected by the extent of the due diligence that needs to be conducted, and by potential legal and purchase price discussions arising out of such due diligence. Following signing of the share purchase agreement and provided that closing has not occurred in direct connection with the signing of the share purchase agreement, acquisitions are generally closed within one to three months, provided that no in-depth scrutiny has been called for by any authority such as under the foreign direct investment regime and notification to the Competition Authority, which may prolong the process.

In public company acquisitions, the timeline depends (among other factors) on the acceptance period set by the offeror. During 2024 and 2025, regulatory interventions had a tangible impact on transaction timelines. Heightened geopolitical tensions, expanded foreign direct investment screening regimes and sustained antitrust scrutiny have increased execution complexity, particularly in cross-border and strategic transactions.

Transactions subject to regulatory review often face material delays, with long-stop dates increasingly extended beyond traditional six-month periods. Regulatory approvals have therefore become key gating factors in transaction planning, requiring longer lead times at an early stage.

Under to the Act on Public Takeovers applicable to shares listed on a regulated market, a mandatory offer is triggered when a person who previously held no shares or held shares representing less than 30% of the voting rights acquires additional shares carrying voting rights, and thereby, alone or together with a group of persons acting in concert, directly or indirectly exceeds the 30% threshold. In such a case, the relevant person must make a mandatory offer for the remaining outstanding shares.

Even though the Act on Public Takeovers solely applies to shares listed on a regulated market, corresponding rules included in the self-regulatory structure apply to shares listed on, for example, an MTF platform.

Private M&A Transactions

In private M&A transactions in Sweden, cash is the primary form of consideration. To bridge valuation gaps, earn-outs are commonly used, where part of the purchase price is contingent on the target company achieving specific financial or operational milestones after closing.

In transactions where one or more sellers are involved in the day-to-day operations of the target company, reinvestment – which effectively means payment in shares – is relatively common in private equity buy-and-build deals. This approach allows the sellers to retain an ownership stake in the business, creating shared incentives with the buyer and encouraging continued involvement in the business.

In one recent case, the authors observed that where there was a value gap the listed buyer offered warrants in the buyer in addition to cash, in order to reach a bid level acceptable to the sellers, even though the use of earn-outs as previously described is more commonly seen. A value gap could also be closed by the buyer withholding a part of the consideration by issuing a promissory note rather than paying upfront in cash, resulting in a deferred payment.

Public M&A Transactions

In a public takeover situation, cash is also the primary form of consideration. An offeror may offer cash, shares or a combination of both. However, in a mandatory offer, the offer must include a cash alternative, ensuring that all shareholders have the right to receive cash payment. Shareholders have the option to reject the offer if they consider it insufficient, in which case the bidder would be required to raise the offer to meet a price level that is acceptable to the seller collective.

According to Swedish takeover rules, mandatory offers must be unconditional. However, it is permitted to include a condition that the company must obtain the necessary regulatory authorisations. A takeover procedure is therefore typically structured in such a way that the offeror first makes a voluntary offer before the mandatory bid rules come into force, allowing the offeror to set the terms of the offer. Common conditions include:

• that the offer will be accepted provided that the offeror acquires shares representing more than 90% of the total issued shares of the target company;
• that the offeror shall obtain all necessary approvals, authorisations, decisions and other necessary actions from the relevant governmental authorities or similar bodies on terms acceptable to the offeror;
• that the target company shall refrain from taking any action that may adversely affect the terms and conditions of the offer; and
• the right to waive one or more conditions, thereby rendering the offer unconditional.

Regulatory uncertainty has also contributed to increased use of robust regulatory protection clauses in transaction agreements – in particular, so-called “hell or high water” clauses, under which buyers commit to taking extensive steps to secure regulatory clearance.

In Sweden, the typical minimum acceptance threshold for a takeover bid is over 90% of the shares and voting rights. If this threshold is reached, the offeror may initiate a squeeze-out procedure under the Swedish Companies Act, whereby the remaining minority shareholders’ shares are compulsorily acquired. Additionally, minority shareholders can also demand a squeeze-out if a majority shareholder holds over 90% of shares. According to the Swedish Companies Act, minority shareholders must receive cash compensation for their shares in a squeeze-out process.

Another key control threshold is ownership of more than 50%, which allows a shareholder to take decisions by simple majority, thus effectively controlling the company by (for example) being able to solely appoint the board. With this level of control, the shareholder can effectively direct the company’s management and strategic direction. It should be noted that a company’s articles of association may stipulate majority requirements that differ from those set out in the Swedish Companies Act. These requirements may require a qualified majority or unanimity for certain decisions, but may also allow a lower voting threshold than would otherwise apply. However, for certain decisions, the law sets a minimum voting threshold that cannot be lowered by the articles of association.

Furthermore, holding two thirds of the shares gives a shareholder the power to pass major corporate resolutions, including amendments to the company’s capital structure, and changes to the articles of association. However, it is unusual for the acceptance threshold to be set as low as 50%. Offerors typically set a higher threshold but retain the option to waive this condition later. Therefore, if the initial acceptance level is not met, they can still proceed with the offer, provided they have secured control by exceeding the 50% threshold. In such cases, the bid becomes unconditional and binding.

Private M&A Transactions

Conditions on financing being obtained occur, although they are not very common. This is mainly due to commercial reasons as the seller would typically require the acquirer to secure financing ahead of entering into the share purchase agreement by not accepting such condition precedent.

Public M&A Transactions

In a takeover situation, an offer may only be submitted after preparations proving that the offeror has the financial capacity to carry out the offer. For a full or partial cash offer, the offeror must have sufficient financial resources to cover the entire consideration offered in cash. If an acquisition loan is required and its payment conditions are not listed as conditions for the completion of the offer (even if the room for such completion condition is limited), these conditions must be ones that the offeror can practically ensure being fulfilled. The full offer amount, assuming full acceptance, must be available for immediate drawdown under these conditions when the offer is made public.

Private M&A Transactions

In private transactions, the parties are generally free to agree on such provisions.

Public M&A Transactions

Under Swedish law, deal security measures such as break-up fees, match rights, force-the-vote provisions and non-solicitation clauses are strictly limited and generally not allowed without specific approval. The takeover rules require the target company’s board to act in the best interests of all shareholders and to avoid measures that could unfairly favour one offeror over another or restrict shareholder choice.

As a general rule, the board of directors of the target company is not allowed to enter into any offer-related agreements with the offeror. Consequently, break-up fees are not allowed. However, under certain circumstances, the Securities Council may grant exemptions and allow a protective measure. It should be noted that the bidder often secures the support of key shareholders before making the offer (see 6.11 Irrevocable Commitments).

Private M&A Transactions

Shareholders in private M&A transactions may enter into a shareholders’ agreement that allows the parties to agree on additional provisions on corporate governance and their internal relationship as shareholders. Such provisions may include the right to appoint board members or veto certain proposals/resolutions at the general meeting or board meetings. However, under Swedish law, shareholders’ agreements are generally not binding on the company, and any breach of the agreement must therefore be resolved between the shareholders.

Public M&A Transactions

As mentioned previously, a theoretical key control threshold is over 50%, which gives a shareholder various rights, such as the right to appoint the board of directors. Another key control threshold is two-thirds ownership, which enables a shareholder to pass important company resolutions (see 6.5 Minimum Acceptance Conditions). However, a shareholder can effectively control the company even with a lower percentage of voting rights than previously set out, due to the fact that not all shareholders will be present and cast their votes at the general meeting. In practice, the ability to control a company through a lower shareholding percentage depends on the overall ownership structure. It is easier to exercise control in a company with a widespread ownership consisting of a large number of shareholders holding small amounts of shares each. In addition to gaining control by purchasing more shares, a shareholder may acquire governance rights by entering into voting agreements with other shareholders.

In Sweden, shareholders may vote by proxy. Under the Swedish Companies Act, a shareholder not present at a general meeting may appoint a proxy through a written, signed and dated power of attorney. Such power of attorney may not be older than one year, unless a longer validity period – up to five years – is expressly stated.

As a general rule, companies may not engage in proxy solicitation. This prohibition aims to prevent the board from using company resources to influence voting outcomes at general meetings.

Swedish law further allows general meetings to be conducted entirely by digital means. Subject to authorisation in the articles of association, companies may hold entirely online-based general meetings, which is particularly practical for companies with an international shareholder base. That said, there remains a strong cultural preference in Sweden for physical shareholder meetings, particularly among listed companies. Proposals by certain larger listed companies to introduce provisions in their articles of association permitting fully digital meetings have therefore attracted vocal criticism. 

Under the Swedish Companies Act, a shareholder holding more than 90% of the shares may initiate a squeeze-out of minority shareholders, who have a corresponding right to require a buyout. This right applies regardless of whether the shares were acquired through a public offer or otherwise.

If a majority shareholder initiates a squeeze-out and the minority disputes the redemption or the price, the matter is referred to arbitration. The arbitral tribunal determines, among other things, the validity of squeeze-out, any right to early access to the shares, and the final redemption price. The proceedings are conducted under the Swedish Arbitration Act (1999:116), unless otherwise provided in the Companies Act, and conclude with an arbitral award transferring ownership to the majority shareholder.

In takeover situations, offerors may seek to secure commitments from major shareholders through irrevocable undertakings, whereby the shareholder agrees to accept the offer if it is made. Such agreements can be negotiated before a formal offer is submitted, strengthening the offeror’s position and increasing deal certainty. While some irrevocable undertakings are unconditional, others may include outs, allowing shareholders to withdraw their commitment if a superior competing offer arises.

Under Swedish takeover rules, the offeror must disclose the extent to which binding or conditional commitments to accept the offer have been secured from shareholders of the target company, or whether shareholders have expressed positive statements regarding the offer.

Public Takeover

Once the offeror has decided to make a takeover offer and entered into an undertaking with the regulated market to comply with the applicable takeover regulations, it must announce the offer as soon as possible. The main terms to include in such announcement are (for example):

• the price;
• any premium, alongside its calculation;
• how the offer is financed; and
• any conditions for completion.

Simultaneously, the information must be submitted to the stock exchange and the Financial Supervisory Authority.

In the event of a mandatory offer, the offeror must immediately disclose their shareholding in the company and, within four weeks thereafter, make a public offer for the remaining shares.

Inside Information

The MAR regarding inside information also applies to takeover offers, as the offers may constitute inside information (see 5.1 Requirement to Disclose a Deal).

The Prospectus Regulation stipulates a requirement to publish a prospectus if the public offer includes remuneration in newly issued shares in the offeror. A prospectus must be made publicly available prior to offering securities to the public or admitting securities to trading on a regulated market. However, there are several exceptions which, if applicable, result in the publication of a prospectus not being mandatory.

The previously mentioned prospectus (see 7.2 Type of Disclosure Required) contains information about the issuer’s assets and liabilities, profits and losses, and its financial position and future outlook.

Private M&A Transactions

In a private transaction, there is no obligation for documents to be made publicly available. However, other transaction-related documents – such as corporate documentation produced to facilitate amendments to the board of the target or changes in the articles of association – become accessible for the public once filed for registration. This is due to the Swedish principle of public access to information, which ensures that documents held by public authorities are classified as public records. In certain instances, documents pertaining to individuals’ business or operational circumstances may be subject to confidentiality if there is a reason to believe that disclosure of the information could harm the individual – for example, in terms of competitive disadvantages.

Public M&A Transactions

In the case of a public takeover, the offer document must be made public, and the board of the target company is required to disclose its opinion on the offer, along with the reasons for this opinion, at least two weeks before the expiry of the acceptance period.

Directors owe fiduciary duties to the company and all shareholders. They must act in the best interest of the company as a whole, ensure equal treatment of shareholders, and avoid granting undue advantages to specific shareholders or third parties to the detriment of the company.

In public takeover situations, directors must act in the interest of all shareholders and may not pursue personal interests or favour one shareholder or competing offeror over another. Under Chapter 5 of the Act on Public Takeovers, the board may not, without shareholder approval, take measures if such measures are likely to adversely affect the conditions for launching or implementing the offer.

In Sweden, the use of independent bid committees is relatively common, especially when conflicts of interest arise. While not mandatory, these committees ensure fairness and objectivity when evaluating offers presented to the company. In such cases, the committee protects the interests of minority shareholders and ensures an impartial evaluation of the offer.

The approach in Swedish law has been that, in principle, a board member should not be liable for damages for bad business.

However, according to the Companies Act, a shareholder who has suffered damage as a result of a director’s wilful misconduct or negligence in the performance of their duties is entitled to compensation. Thus, a distinction needs to be made between whether it was a merely a bad business decision or whether the board member acted in misconduct or negligence.

Typically, any transaction – whether private or public – requires external legal advice, and it is common to involve financial advisers. In relation to certain cases where a public offer has been presented, the directors in the target are required to conduct a formal evaluation of the offer, a process that often involves engaging external specialists to issue a fairness opinion on the offer value in relation to the company.

The principles of conflict of interest between the board of directors, managing directors or shareholders and the company are well established and regulated under the Companies Act.

Member of the Board of Directors or Managing Director

According to the Swedish Companies Act, no member of the board of directors or managing director may participate in decisions concerning:

• an agreement between the company and the member themselves;
• an agreement between the company and a third party in which the member has a material interest that may conflict with the company’s interests; or
• an agreement between the company and a legal entity that the member is authorised to represent, either alone or together with another person.

Shareholders

Additionally, under the Swedish Companies Act, a shareholder may not vote, either in person or through a proxy, on the following matters:

• (i) legal proceedings against themselves;
• (ii) their discharge from liability for damages or other obligations to the company; or
• (iii) legal proceedings or discharge as referred to in (i) and (ii) involving another person in which the shareholder has a material interest that may conflict with the company’s interests.

Advisers

Before accepting an engagement, the company’s advisers normally ensure that potential conflicts of interest are assessed. In addition, lawyers in Sweden must comply with the Swedish Bar Association’s Code of Conduct, which stipulates that a lawyer may not take on assignments where there is a conflict of interest. For example, a lawyer may not represent a client if the lawyer currently represents, or has previously represented, the opposing party in the matter. It is important to emphasise that the assessment of conflicts of interest applies to the whole law firm, meaning that no member of such firm is allowed to be in a position of conflict.

Hostile takeover offers are both authorised and common in Sweden. Nevertheless, hostile offers are less common than non-hostile offers. This is mainly due to the Swedish corporate culture, which emphasises co-operation between management and shareholders. Furthermore, there are strong legal protections for shareholders, such as the principle of equal treatment, which complicates hostile acquisitions and ensures that all shareholders are treated fairly.

As a general rule, the Act on Public Takeovers prohibits defensive measures in the event of a public takeover offer. If the board of directors or the managing director of a company has reason to believe that such an offer is imminent or has already been made, the company may not take any action that could prevent or hinder the implementation of the offer, unless authorised by the general meeting. However, the board of directors may, without the approval of the general meeting or an exemption from the Swedish Securities Council, seek alternative offerors (known as white knights).

The most common reactive measure against a hostile offer is for management to seek alternative offerors and initiate a structured auction process to maximise price competition. Additionally, companies may include precautionary measures in their articles of association that address decision-making processes, board elections, share classes and corporate governance controls to protect against unwanted takeovers.

As mentioned previously, the board’s ability to enact defensive measures is highly limited, and generally requires the shareholders’ consent. However, any actions taken by the board must be in the best interests of the company, which, in this context, reflects the collective interests of the shareholders.

Although the board may choose not to recommend the offer, it cannot prevent an offeror from making a public offer for the company’s shares, nor can it prevent a shareholder from accepting such an offer and ultimately acquiring the company, unless a consent clause is stipulated in the articles of association.

As mentioned previously, in most cases disputes related to M&A are settled by arbitration. Statistics for 2024 from the Arbitration Institute at the Stockholm Chamber of Commerce show that 57 disputes relating to M&A were registered, representing 28% of all disputes received by the Institute during the year, and making M&A the most common field of arbitration in Sweden. Statistics for 2025 have not yet been published.

Litigation in private M&A deals typically arises from warranty claims following closing of the transaction or in connection with calculation of earn-outs where the parties have differences of opinion on the earn-out to be paid – particularly disagreement on the underlying earn-out calculation principles.

In 2020 and 2021 – a period characterised by high market valuations – the authors noted that transactions included earn-outs calculated on the basis of an estimate of the further development of the target companies’ then-record results. In some cases, such earn-outs were granted by buyers using a buy-and-build structure with a strategy to consolidate certain sectors of the Swedish market. However, as the market subsequently declined, sellers faced unexpected consequences when the earn-outs became unattainable, or buyers experienced liquidity shortages preventing them from meeting their obligations under the earn-out agreements.

Above all, this led to an increase in disputes over earn-outs and may have affected the willingness of sellers to agree to earn-outs in general, especially in relation to certain categories of buyers. This trend has since subsided, and there is no indication in market practice that new categories of earn-out disputes have emerged.

Shareholder activism in Sweden may include blocking major public offers. A shareholder holding at least 10% of the shares can prevent an offeror from reaching the 90% threshold required to initiate a squeeze-out.

Minority shareholders holding at least 10% also benefit from specific minority rights under the Companies Act, and certain corporate resolutions require a 90% majority; minority shareholders can influence corporate decisions and governance, challenge management and protect their investment interests.

For example, shareholders holding at least one tenth of all shares may request the appointment of a minority auditor and a special examiner, with the application submitted to the Swedish Companies Registration Office, which also appoints the minority auditor and one or more special examiners. Furthermore, at the request of shareholders representing at least one tenth of the total number of shares, the general meeting shall decide on the distribution of half the profit for the year shown in the approved balance sheet after the deduction of certain items.

The authors see examples of activist activity by (for example) privately owned Swedish investment companies that focus on building activist funds. Such companies acquire significant minority stakes in listed European companies and act as an active owner with the aim of creating long-term and sustainable value.

In Sweden, listed companies have historically maintained, and continue to maintain, different classes of shares with different voting rights pertaining to the different classes (a 1:10 ratio being allowed). This, together with the fact that in Sweden it is historically common for listed companies to have one or a few shareholders holding a large percentage of the outstanding shares, makes it difficult for activist shareholders to force through any actions not approved by the majority shareholder. Thus, minority shareholders’ influence is often limited to blocking decisions and/or transactions rather than promoting or encouraging any suggestions of their own.

While there are minority protection rules in place, their scope is relatively limited. These rules are designed to safeguard the interests of minority shareholders, but they do not provide extensive protections in all situations.

As mentioned previously, owning more than 10% of a company’s shares grants shareholders the ability to block transactions, and they may thus interfere with completion of announced transactions or force the offeror to complete the offer at an acceptance level not enabling a squeeze-out.