Business acquisitions in Norway

Norway has for some time fairly consistently attracted foreign investments. Below we provide a brief overview of Norway and Norwegian industry as investment targets, including some process and negotiation issues.

General overview

Norway is a small country, with a population of approx 5 million. Norway is well known as a country with an oil-driven economy, being a world top five exporter of oil and natural gas. However, Norway also possesses other natural resources, and is the sixth largest hydropower producer, and the second largest seafood exporter, in the world. In addition to the offshore industry, seafood industry and renewable energy, the maritime industry and the ICT industry are key industries in Norway.

Norway has a stable and transparent political environment. According to IMF estimates for 2013, Norway has the second largest GPD per capita in the world. Norway further boasts a highly educated workforce, responsible resource management and technologically advanced industries.

There are no general requirements that will be special for a foreign investor compared to Norwegian investors. However, some business sectors have special requirements regarding foreign ownership, such as the energy sector and the finance sector.

Norway has for some time fairly consistently attracted foreign investments. At year end 2013, foreign investors held a 37% aggregate ownership stake in the companies listed on the Oslo Stock Exchange. In 2010, 1,600 Norwegian industry businesses had foreign ownership, a 90 % increase from 2003. Foreign ownership is particularly common within the technology, processing and maritime/offshore industries. The increase in foreign investments has continued over the last few years, and the Norwegian Venture Capital Association reports that 2013 had the highest level of initial investments in Norwegian portfolio companies by foreign PE companies ever. Moving into the first quarter of 2014, we have seen, inter alia, the debt collection company Aktiv Kapital being sold to the US company Portfolio Recovery Associates, and the Nordic payment services company Nets being sold to a consortium established by the private equity firms Advent International and Bain Capital, along with the Danish ATP.

Outlook for the Norwegian transaction market

As has been the case in other jurisdictions, the Norwegian transaction market has had a bumpy ride over the last few years. However, we (once again) see signs that things may be improving. The increased foreign interest and transactions mentioned above can be seen as indications of improvement. The substantial fundraising by HitecVision, the leading European private equity investor focused on the oil and gas industry, who received commitments of USD 1.9 billion for its new fund HitecVision VII L.P., shows a positive investor view with respect to opportunities in that particular industry.

In addition to the fund raising by HitecVision, and by other Norwegian and Nordic PE firms over the last year, we see that Norwegian, and foreign, banks are increasingly willing to fund acquisitions. This is a key catalyser for the transaction market.

Private transactions – selected process and negotiation issues

With respect of private acquisitions in Norway, the process will generally not differ from those in other jurisdictions in Western Europe. Typically, a Norwegian share purchase agreement is less comprehensive than those seen in e.g. the UK. However, years of influence by contractual practice in UK and the US generally, and foreign buyers specifically, has contributed to increasing the volume of Norwegian agreements, in particular in transactions with one or more non-Norwegian parties. In auction processes, the first draft will typically be prepared by the seller. In other transactions, the drafting initiative will vary.

The material discussion and negotiation items will typically be the same, whichever jurisdiction the transaction is carried out in, and the outcome will depend i.a. on the negotiation position and strength of the parties.

With respect to warranties, the respective areas covered will often be the same in Norwegian transactions. However, the number of warranties, and the level of detail of the same, is subject to wide variation from deal to deal. Warranties are commonly qualified by disclosures made by the seller. This will generally mean disclosures in the entire process including due diligence, not simply in disclosure letters, and the buyer will typically not be entitled to claim for indemnification based on matters the buyer ought to have been aware of prior to signing based on the disclosures made.

On the limitations of liability, such as time limits, de minimis, basket and cap amounts, the markets practice in Norway varies, but as is the case for many negotiations items, the terms will often be more seller friendly in auction processes with cap amounts around 10-15 % and short time limitations.

Contact persons

Terje Gulbrandsen, e-mail:, mobile: +47 48 01 65 88

Erik Lind, e-mail:, mobile +47 48 01 65 67

The Author

Terje Gulbrandsen
Terje Gulbrandsen Terje Gulbrandsen is a partner at Steenstrup Stordrange’s office in Oslo, and is a senior member of the M&A and Corporate Practice. He mainly works with transactions, securities law, corporate law and financing. As well as being an Attorney at Law, he holds a Master of Business and Economics. Gulbrandsen is recommended within Corporate and M&A in Legal 500 in 2014, and in M&A as well as Banking and Finance in IFLR 1000 in 2014. Gulbrandsen has also been selected by his peers to be included in Best Lawyers Norway (in the category “Banking law”) 2013 and 2014.

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