M&A in Scandinavia

The market for mergers and acquisitions in Scandinavia is strong and growing. It shows similar strength as the UK market relative to the size of the economies. In comparison with continental European markets, the Scandinavian markets are very strong.

The strength of the Scandiavian M&A markets reflects strong and open economies and stable political conditions.

The Scandinavian countries also enjoy a substantial community of highly skilled professional advisers.

Due to ample access to risk capital, competition for good targets is strong. The successful bidders are consequently either players in the same industry with the ability to extract substantial synergies or insightful private equity players who see opportunities for growth.

The competitive situation results in potential buyers having to present themselves as good buyers and future owners in addition to paying the right price. This has led to M&A processes becoming less confrontational, according to Erik Thyness and Harald Hellebust, M&A partners at Norwegian law firm Wiersholm. The process is now more co-operative, with commercial realities being reflected and the main priority being to ensure that a deal gets done.

This change also affect the way in which legal advisers should operate.

With many buyers chasing few attractive targets, legal advisers need to be pragmatic, focusing on commercially critical points. In addition, like other market players, they must contribute to reducing cost and cutting through complexity in the process by being flexible in their approach and  working closely with the clients with a view to distinguishing between what is and isn’t important.

In the Norwegian/Nordic M&A market, some of the stress and risk has been taken out of deals by M&A insurance (often referred to as Warranty and Indemnity (W&I) insurance), a concept that has gained considerable momentum over the last few years. M&A insurance enables sellers to get a ‘clean exit’, i.e. avoiding a period following completion of a deal when they could be held liable if new and adverse information about the target should turn up. This is particularly attractive to private equity firms who distribute proceeds to their investors following a sale. It is also useful for buyers because it means they get a creditworthy counterparty that should handle claims in a professional manner. Insurance companies are typically also more flexible than sellers with respect to level of warranty protection, although the premium will obviously also increase with the level of protection. The flip side is that M&A insurance implies added costs and also some added complexity to the process and, ultimately, not all risks are insurable.

For the time being, there are few clouds on the horizon.

Strong economies, political stability, a highly educated, flexible and highly motivated workforce, and a competitive level of taxation will ensure that Scandinavia will remain a safe harbour in a troubled Europe, making Scandinavia an attractive place to invest.


The interview was filmed with Sarah Lockett, Business Correspondent of The Business Debate, Harald Hellebust; Partner, Wiersholm, and Erik Thyness; Partner, Wiersholm.

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