Public mergers and acquisitions in Norway: overview

A Q&A guide to public mergers and acquisitions law in Norway.

The country-specific Q&A looks at current market activity; the regulation of recommended and hostile bids; pre-bid formalities, including due diligence, stakebuilding and agreements; procedures for announcing and making an offer (including documentation and mandatory offers); consideration; post-bid considerations (including squeeze-out and de-listing procedures); defending hostile bids; transfer taxes; other regulatory requirements and restrictions; as well as any proposals for reform.

To compare answers across multiple jurisdictions, visit the Country Q&A tool Country Q&A tool.

This Q&A is part of the global guide to public mergers and acquisitions. For a full list of jurisdictional Q&As visit www.practicallaw.com/acquisitions-guide.

Contents

M&A activity

1. What is the current status of the M&A market in your jurisdiction?

Although the 2014 public to private market did not become as active as it was in 2013, there was still a lot of business going on in Norway, with several voluntary and mandatory offers for shares and other transactions involving listed companies. These included:

  • Bayer Nordic SE's acquisition of Algeta ASA.

  • Geveran Trading Co Ltd's takeover bid for of Norwegian Property ASA.

  • Mitsubishi Corp's acquisition of Cermaq ASA.

  • Apax Partners' acquisition of Evry ASA.

  • Silk BidCo AS's acquisition of Hurtigruten ASA.

  • OBOS' acquisition of BWG Homes ASA.

A total of 15 takeover offers for listed companies were announced in the market during 2014, with a total deal value of about EUR7.6 billion. This was a 30% dive in volume from the 2013 figure, in which there were in total 22 public takeovers and attempted public takeovers, with a total deal value of about EUR9.2 billion. Most of the completed public-to-private transactions were acquisitions made by corporate trade buyers rather than private equity sponsors, but for 2014, the market also witnessed an increasing interest from private equity funds.

 
2. What are the main means of obtaining control of a public company?

A public offer, whether a voluntary or a mandatory tender offer (aimed at control), is the most direct and common way to obtain control of a public company (see Question 16). The target shareholders are asked to accept the offer being made to them by the bidder. Such a bid is frequently combined with either:

  • Gradual stake-building (acquiring a substantial shareholding in the target before announcing a bid).

  • The securing of pre-acceptances leading to a public offer to increase the momentum in the bid and the chances of a successful takeover.

Statutory mergers are also common in transactions involving Norwegian companies, provided the two merging companies are both domestic. A statutory merger is conducted under the Norwegian Public Limited Liability Companies Act (allmennaksjeloven, 13 June 1997, No. 45). Since Norway has implemented Directive 2005/56/EC, it is also possible to conduct a statutory merger of a Norwegian company cross-border within the European Union and European Economic Area (EEA). In a statutory merger, the assignee company (or its parent) issues new shares to the shareholders of the assigning company as consideration for its assets and liabilities.

A Norwegian statutory merger requires at least 80% of the consideration to be in shares, and up to 20% may be in cash. After completion of the transaction, the assigning company is dissolved. The target shareholders and also normally, the bidder shareholders are asked to vote on a merger plan prepared by the board of directors of the bidder and the target. A decision to merge with another company under the Norwegian Public Limited Liability Companies Act requires only a two-thirds' majority vote at a general meeting, as opposed to the (more than) 90% acceptance level needed to squeeze-out minority shareholders in a public offer (see Question 20). A merger under the Norwegian Public Limited Liability Companies Act is normally a non-taxable event (the opposite applies for cross-border mergers) (see Question 17). However, public tender offers and other offer structures are often used instead of a statutory merger, which:

  • Cannot be used by foreign companies (outside the EU or EEA).

  • Only allow 20% of the consideration to be given in cash.

  • Requires more formalities and documentation.

  • Normally takes longer to complete than a public offer (among other things, due to creditor notice periods).

In the following, statutory mergers are only dealt with to a limited extent.

 

Hostile bids

3. Are hostile bids allowed? If so, are they common?

A bid can be either unsolicited or recommended by the target board, and hostile bids are permitted. A bid may become hostile if it has been rejected by the target board. A hostile bid is regulated by the same regime as recommended bids (see Question 5, Recommended bid).

Hostile bids occur relatively frequently. In 2013, about 32% of the tender offers launched in the Norwegian capital market were not recommended by the targets' boards and can therefore be characterised as hostile. In 2014, only 12% of the tender offers launched were hostile, while first half of 2015, 13% of the bids were not recommended by the target's board.

A Norwegian target may have provisions in its articles of association (that is, the bye-laws) that include provisions to defend against hostile bids (for example, poison pills), but rarely do (see Question 23).

 

Regulation and regulatory bodies

4. How are public takeovers and mergers regulated and by whom?

Public takeovers

The principal legislation and rules regulating takeovers of publicly listed companies is found in Chapter 6 of the Norwegian Securities Trading Act (verdipapirhandelloven, 29 June 2007) (STA). The STA implements the EU Directive 2004/25/EC on takeover bids (Takeover Directive). Chapter 6 of the STA applies to takeovers of targets with their:

  • Registered offices in Norway if any of their shares are admitted to trading on a regulated market in Norway (which includes the Oslo Stock Exchange and Oslo Axess, both operated by Oslo Børs ASA).

  • Registered offices outside of the EEA if any of their shares are admitted to trading on a regulated market in Norway, provided that:

    • their shares or other securities comparable to shares are not listed on a regulated market in the company's home state;

    • the Norwegian regulated market has not issued an exemption from the takeover rules.

  • Main office in Norway, but whose shares are admitted to trading on a regulated market in another EEA state and not in Norway.

  • Main office in an EEA state other than Norway, whose shares are admitted to trading on a regulated market in Norway and not in that other EEA state (provided that certain other conditions are fulfilled).

Consequently, the Norwegian takeover rules do not apply to takeovers of targets with their registered offices outside of the EEA whose shares are admitted to trading on a regulated market:

  • Both in Norway and in their home state.

  • In Norway, but where an exemption has been granted.

Non-Norwegian EEA companies listed on a Norwegian regulated market will be subject to split jurisdiction:

  • Matters such as mandatory offer threshold, defence actions and available exemptions together with employment and corporate law are governed by the rules of the target's home state.

  • The Norwegian takeover rules will govern legal matters for example, the offer process, the offer price, the offer document and its contents and announcements.

The Oslo Stock Exchange (OSE) (see box, The regulatory authorities) can grant individual exceptions from the rules with regard to targets:

  • Whose shares are admitted to trading on a regulated market both in Norway and in a non-EEA state.

  • With their registered offices outside of the EEA whose shares are admitted to trading on a regulated market in Norway.

The only regulated marked in Norway being qualified as a stock exchange (based on EU terminology) is the OSE, even though the Norwegian Stock Exchange Act (lov om regulerte markeder, 29 June 2007) allows for establishing other stock exchanges (and regulated markets). The OSE is operated by Oslo Børs ASA, who also operates Oslo Axess, a regulated marked mainly targeting issuers with a limited operating history.

Both the OSE and Oslo Axess is subject to the same reporting and trading regulations, including the public takeover rules (STA Chapter 6). At the moment, no competing stock exchanges have been granted concessions to operate a regulated market for the trading of shares in Norway. However, the Nordic power exchange (Nord Pool) has been granted a concession as a commodities exchange. In addition Fish Pool, a part of OSE, has been granted a concession as a regulated market place for the buying and selling of financial salmon contracts at an international level.

The Securities Trading Regulations (verdipapirforskriften, 29 June 2017) (STR) sets out more detailed general prospectus requirements, disclosure obligations and additional provisions on the takeover of listed companies.

The legislation above is supplemented by, among others:

  • The Continuing Obligations of Stock Exchange Listed Companies (Continuing Obligations) issued by the OSE, with which all companies listed on the OSE and Oslo Axess must comply.

  • Guidelines and recommendations issued by the OSE.

A Code of Practice for Corporate Governance (Code) was issued in 2004 (last amended 30 October 2014). The Code includes provisions that deal with the takeovers of companies whose shares are admitted to trading on a regulated market. Although the Code comprises recommendations and is therefore not legally binding, all companies listed on the OSE and Oslo Axess must either confirm the application of, or explain their deviation from, the principles set out in the Code (Continuing Obligations).

Mergers

In general, statutory mergers are not covered by the rules on public takeovers in the STA (Chapter 6, STA). Statutory mergers involving a Norwegian company whose shares are admitted to trading on a Norwegian regulated market are dealt with under the Norwegian Public Limited Liability Companies Act. Chapter 13 of the Act sets out the mandatory legal procedure to be followed in relation to statutory mergers involving public companies. However, transactions that do not meet the formal requirements for a statutory merger but are similar in form (such as stock-for-stock exchanges) may be subject to the STA's takeover rules if the target's shares are admitted to trading on a regulated market in Norway. However, the Continuing Obligations apply to mergers involving at least one listed company.

Other legislation

The legislation referred to above provides the specific legal framework that is supplemented by the following statutes and supporting regulations:

  • Contract Act.

  • Sales of Goods Act.

  • Income Tax Act.

  • Accounting Act.

  • Competition Act.

  • Employment Act.

As Norway is a member of the European Free Trade Association (EFTA) and the European Economic Area (EEA), most EU regulations relating to M&A transactions have been incorporated into Norwegian law. Cross-border transactions within the EU involving publicly listed companies are therefore subject to the strict antitrust regulations promulgated and enforced by the European Commission and the EFTA Surveillance Authority (ESA). The Norwegian Competition Act has corresponding merger control provisions that authorise the Norwegian Competition Authority (NCA) to intervene against anti-competitive concentrations. From a practical perspective, the "one-stop shop" principle formulated in Council Regulation No. 139/2004 effectively averts unnecessary cross-review by the EC, the ESA and the NCA.

Other relevant EU regulations implemented in Norway include the:

  • Directive 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading (Prospectus Directive).

  • Directive 2004/25/EC on takeover bids (Takeover Directive).

  • Directive 2004/109/EC on transparency requirements for securities admitted to trading on a regulated market and amending Directive 2001/34/EC (Transparency Directive).

  • Directive 2003/6/EC on insider dealing and market manipulation (market abuse) (Market Abuse Directive).

  • Directive 2004/39/EC on markets in financial instruments (MiFID I).

Supervision

The Norwegian Ministry of Finance (Finansdepartementet) and the Financial Supervisory Authority of Norway (Finanstilsynet) (FSA) (see box, The regulatory authorities) administers and supervises trading in financial instruments. In addition, they monitor compliance with securities trading legislation. The OSE is responsible for the supervision and application of the takeover rules. The FSA has the authority to supervise and approve the issuance of prospectuses (Chapter 7, STA).

Non-compliance

If a bidder is in breach of the rules on mandatory or voluntary tender offers (Chapter 6, STA), the OSE can impose daily fines on both individuals or on companies breaching these rules. These fines can run until the breach is remedied, and the OSE also determines the level of the fine. One example of such a fine is the 2007 takeover of Eastern Drilling. Seadrill (also listed on the OSE) was ultimately fined a daily rate of NOK4 million (US$675,000) for failing to make a mandatory offer at a price approved by the OSE.

In addition, a shareholder that triggers the threshold for making a mandatory offer and then neglects to make such offer or to sell down below the threshold cannot, as a general rule, for the duration of the mandatory bid obligation, exercise any right in the target other than the right to dividend, for the duration of the mandatory bid obligation.

 

Pre-bid

Due diligence

5. What due diligence enquiries does a bidder generally make before making a recommended bid and a hostile bid? What information is in the public domain?

Recommended bid

As a rule, a bidder who launches a public tender offer for a listed Norwegian target company does not have a right to be admitted to conduct a due diligence. Consequently, one of the bidder's main hurdles in such public deals is obtaining access to due diligence. The target is not restricted from facilitating a due diligence investigation by a bidder, however, the scope and structure of such reviews in the context of a listed target will vary significantly both for recommended and hostile bids.

In general, a bidder should conduct as much due diligence as possible before launching a bid. Normally, the bidder carries out an initial due diligence before approaching the target using publicly available information. At a later stage, after having initiated contact with the target but before proceeding with the bid, the bidder will ask the target for further information and due diligence access. If access is granted, the due diligence review is usually more limited when the target is listed compared to a takeover of a private company. This is generally due to the fact that all price-sensitive information relating to the shares has already been disclosed to the market (unless the company legally delays to disclose such insider information for a specific period of time, see Question 6). In addition, the listed target's board has to carefully balance the need to disclose information to the bidder against more extensive legal and contractual secrecy obligations, and the board's fiduciary duties to its shareholders.

Sometimes a pre-bid due diligence may be considered difficult when the target is listed. In a voluntary public offer, the bidder is permitted to make the admission to due diligence a condition precedent to the offer. This does not, however, apply under the mandatory tender offer rules. As a result, voluntary bids are on occasion, made conditional on the result of investigations during the offer period into sources other than those publicly available. In this case, the scope is often limited to confirmatory due diligence and limited in time (one to three weeks, during the offer period).

However, in public deals it is now market practice for a prospective bidder to enter into discussions with the target to negotiate for the target's support in recommending a "negotiated" tender offer (giving the target board an opportunity to negotiate for an increased bid price for the shares as "compensation" for the target board's recommendation to be provided already (or at all) at the announcement of the bid).

Provided the board is prepared to recommend such an offer, such a "friendly" bidder will normally be admitted to a certain level of due diligence by the target before the bid is announced to avoid a due diligence condition, which from the shareholders' perspective may be viewed as a potential "out" for the bidder. Such due diligence will then be subject to strict confidentiality restrictions. In recommended bids, a bidder may from time to time, in a pre-bid phase, also be allowed to conduct fairly extensive due diligence reviews of non-public information provided by the target in a data room. There are no rules restricting this (with regard to insider information, see below and Question 8).

A listed company cannot give a third party (including a potential bidder) any information that may be considered insider information (section 3-2, STA), without also disclosing that information to the market. However, the target can also grant access to the insider information if certain confidentiality and restrictive procedures are followed. However, the target is not prohibited from providing the bidder access to other information before the bid is announced (see below, Public domain).

Hostile bid

In a hostile bid situation, the target will typically not grant the bidder access to any information that is not already in the public domain. Occasionally, due diligence access may be granted, for example, if the hostile bidder secures acceptances from a satisfactory number of shareholders (for example, more than 50% or two thirds). Note that, providing one bidder with the opportunity to conduct due diligence does not automatically oblige the target to grant the same opportunity to other parties. A competing bidder may seek to argue that equal treatment should allow similar access to that allowed in the first bid. To what extent the target has such an obligation, depends on whether it is considered to be in the best interests of the target and its shareholders to facilitate such due diligence. If it is in the best interests of the target and its shareholders, it could be argued that the target does have such obligation (see also section 14 of the Code, which regulates various aspects of how the board must act in a takeover situation).

Public domain

When making a first assessment as to whether a target is worth pursuing, a bidder has a wide range of publicly available information, for example:

  • Information memoranda/prospectuses used in share offerings by the target company or following a major transaction requiring the target to provide updated information to its shareholders (as described below).

  • Corporate formation documents, articles and other related corporate documents can be retrieved or requested from the Norwegian Registry of Business Enterprises.

  • Audited accounts and related directors' and auditors' reports.

  • Quarterly interim reports (published no later than two months after the end of the relevant reporting period).

  • Announcements published by the target company through OSE.

  • Register of directors, chief executive officers (CEOs), auditors and officers.

  • Information relating to share capital, treasury stock, convertible loans, registered options and warrants.

  • Authorisations to issue shares or acquire treasury stock granted to the board of directors.

  • A list of major shareholders, which is usually available on the issuer's web side. Complete lists may be requested by anyone from the issuer's Norwegian Central Securities Depository (Verdipapirsentralen) (VPS) account manager (a request may lead to the issuer being informed).

  • Agreements with shareholders (above certain minimum thresholds).

  • Information on bond loans, including a full set of the bond documentation, for any bond loans raised in the Norwegian/Nordic bond market.

  • Information on any real estate owned (not leased) by the target in Norway, together with a complete list of registered mortgages on such real estate.

  • Charges registered over the target's inventory and fixed assets.

The target has a continuing obligation to keep the stock market informed of major new developments, including:

  • Significant acquisitions and disposals.

  • Material trading developments, contract awards and similar.

  • Any other events falling within the definition of insider information (section 3-2, STA).

 

Secrecy

6. Are there any rules on maintaining secrecy until the bid is made?

Secrecy is a fundamental principle under the STA and the Securities Regulations, which requires anyone in possession of price-sensitive information constituting inside information to (sections 3-4, STA):

  • Handle such information with due care so that the inside information does not come into the possession of unauthorised persons or is misused.

  • Not disclose inside information to unauthorised persons.

This rule aims to prevent information leaks and distortion of the market, which can cause abuse of insider information. Information about an offer or possible bid is generally considered price-sensitive information constituting insider information. Recipients of such insider information must be made aware of the need for secrecy and the prohibition against the abuse of insider information (section 3-5, STA).

A bidder will normally want to keep a potential bid secret until it is formally announced, to avoid affecting the target's share price or alert potential competing bidders. However, listed target's boards must, on their own initiative and on an ad hoc basis, disclose any information that is likely to have a notable effect on the price of the target's shares or of related financial instruments. To avoid prejudice or harm to legitimate business interests during a negotiation and planning phase, the target may decide to delay disclosure provided that:

  • Postponement does not mislead the public.

  • The insider information is kept in strict confidence between the parties.

  • The OSE is informed about the target's decision to delay disclosure.

Consequently, confidential negotiations with the target's board and a bidder at an initial stage are, with certain constraints, possible before the announcement of the bidder's intention to launch a bid, provided the parties can maintain confidentiality.

The fact that a listed company is discussing a potential takeover or a merger will at some point constitute insider information that must be disclosed to the market. OSE's Appeals Committee has previously ruled that confidential negotiations between a potential bidder and the target's board could trigger disclosure requirements even before it is highly probable that a takeover offer will be launched. Therefore, a bidder and the target's board must be prepared for situations where OSE, and the National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway (Økokrim), take the position that the disclosure requirement is triggered at a very early stage. This could be from when the target enters into a non-disclosure agreement that allows potential bidders due diligence access. However, if a target is approached regarding a potential intention to launch a bid, this will not by itself trigger any disclosure requirements for the target. A listed target is not obliged to comment on rumours, but accurate rumours about a potential bid can indicate that the target is unable to ensure confidentiality, which may require an announcement. These rules apply to all listed companies, whether they are bidders or targets.

A bidder will also be subject to strict secrecy rules if it has been allowed access to the target's confidential or price sensitive information as part of pre-bid due diligence (see Question 5). Every individual granted access to this information must sign confidentiality agreements, and the issuer must maintain a strict list of the individuals. These obligations remain in force until the information is made available to the public or is no longer current, confidential or price sensitive.

 

Agreements with shareholders

7. Is it common to obtain a memorandum of understanding or undertaking from key shareholders to sell their shares? If so, are there any disclosure requirements or other restrictions on the nature or terms of the agreement?

It is customary for a bidder before making a bid and to increase its chance of success, to seek irrevocable undertakings or pre-acceptances from key shareholders to accept the bid once it is issued. In a recommended transaction, such commitments will also commonly be obtained from the target's directors and management shareholders, before making a bid.

These irrevocable undertakings are typically drafted as either:

  • "Soft" irrevocable. This is normally limited to a commitment to accept the offer provided that no higher competing bid is made, although they may also include a "matching right" for the bidder to match a competing bid.

  • "Hard" irrevocable. This is an irrevocable undertaking to sell the shares, regardless of whether or not a subsequent competing higher bid is put forward.

An agreement with shareholders to pay a higher price if the bidder later pays more for shares than offered to all may under certain circumstances affect the price the bidder at a later stage must offer in a mandatory bid.

There are no particular disclosure requirements for such undertakings, other than the general disclosure obligations, disclosure obligations regarding options and similar instruments as part of stake-building (see Question 8) which, however, may imply early disclosure of such undertakings due to the low thresholds set out by law. In Norwegian legal theory it has so far been assumed that the disclosure requirements will not be initiated by properly drafted soft irrevocable undertakings.

If such undertakings are obtained, the seller is usually considered to be the holder of insider information, and therefore cannot trade shares in the target company until an announcement of the bid is made. During this period the seller is also bound to secrecy.

 

Stakebuilding

8. If the bidder decides to build a stake in the target (either through a direct shareholding or by using derivatives), before announcing the bid, what disclosure requirements, restrictions or timetables apply?

To increase its chance of success, a bidder can seek to gradually build a stake in the target through off or on market share purchases outside the offer process. In addition to building a stake in the target through a direct shareholding, bidders may also use different types of derivatives techniques (options and similar instruments). Purchases of shares outside the offer may be prohibited to the extent the bidder is in possession of insider information (see below). In addition to the insider dealing rules, a bidder must pay particular attention to disclosure requirements (see below) and mandatory bid rules during the stakebuilding process. Except for these rules, there are generally few restrictions governing stakebuilding. However, confidentiality agreements entered into between a potential bidder and a target can impose a standstill obligation on a bidder preventing the acquisition of target shares outside the bidding process.

Insider dealing

Norwegian insider dealing legislation applies to both on and off market transactions. The STA incorporates Directive 2003/6/EC on insider dealing and market manipulation (market abuse) (Market Abuse Directive) (Chapter 3, General rules of market conduct). STA defines insider information to be precise information about listed financial instruments, their issuer, or other matter that both:

  • May influence the price of the financial instruments or related financial instruments significantly.

  • Is not publicly available or commonly known in the market.

A person who has insider information is prohibited from:

  • Directly or indirectly subscribe for, purchase, sell or exchange these financial instruments or encourage others to do so.

  • Passing it on to unauthorised parties.

  • Giving advice about trading in the financial instruments that the insider information applies to.

To the extent a bidder is in possession of insider information, a purchase of shares outside the offer can be prohibited and the bidder could be imprisoned or fined for abuse of insider information. Consequently, a bidder should be cautious in trading a potential target's shares on the market before launching a bid, in particular after initial discussions with the target have been initiated. The insider trading provisions do not, however, prevent the bidder from acquiring shares in the target where the insider information relates only to the bidder's intention to make an offer.

Access to and use of insider information will not in itself be considered a violation of the insider trading rules in a situation where the bidder has issued a public bid for a target or is proposing a merger (Article 29, Market Abuse Directive). Hence, access to and use of insider information acquired by a bidder during a due diligence process with respect to the target and the public bid does not in itself necessarily constitute abuse of insider information. A bidder who receives insider information, however, has a duty not to disclose the information to unauthorised third parties. A listed target company granting a bidder access to due diligence documentation may be obliged to disclose insider information that is not yet known in the marketplace. In practice, the target may issue a "wash clean" announcement prior to the bid being launched, disclosing any insider information provided to the bidder in the context of a due diligence.

An issuer whose financial instruments are admitted to trading on a regulated market must ensure that a list of persons given access to insider information is maintained, and will, on request, be required to present this list to the regulatory authorities.

Disclosure obligations

Once a shareholder's proportion of shares, rights to shares, or corresponding proportion of votes (if different) in a Norwegian listed company reaches, exceeds or falls below the thresholds of 5%, 10%, 15%, 20%, 25%, one-third, 50%, two-thirds or 90% as a result of acquisition, disposal or other circumstance, the shareholder must immediately notify the company and the market place (OSE) (section 4-3, STA). A breach of these disclosure rules frequently leads to a fine (these have increasingly grown over the years).

Notification to the OSE must be given by the shareholder immediately after an agreement of acquisition or disposal has been entered into. Such disclosure is also required when one of the above thresholds is crossed through "passive" acquisition or disposal. For example, a company carries out a share capital change but a shareholder does not actively acquire or dispose of any shares or rights to shares. In such cases, notification must be given as soon as the shareholder becomes aware of the circumstances causing his shareholdings to reach, exceed or fall below the relevant threshold. The notification requirement also applies to:

  • Certain convertible debt instruments.

  • Subscription rights.

  • Options to acquire shares.

  • Sale and purchase of, and subscription for, rights to shares.

  • Traded in shares and rights to shares by related persons (see below).

A soft irrevocable undertaking (see below) will probably not be subject to the disclosure obligation, while a hard irrevocable undertaking will be. Norwegian legal theory accepts that long equity derivatives positions that are purely cash-settled (typically, futures) are not subject to any form of securities disclosure obligations.

Pending implementation of the 2013 amendments to Directive 2004/109/EC on transparency requirements for securities admitted to trading on a regulated market and amending Directive 2001/34/EC (Transparency Directive) (see Question 29), it must be assumed that there are no general disclosure obligations with regard to cash-settled financial instruments with an economic effect similar to holding shares. However, the Court of Appeal's ruling in 2009 in the case of Seadrill v OSE has clarified that total return swap (TRS) arrangements under certain circumstances will trigger the above disclosure thresholds.

The following information must be included in the notification to OSE (section 4-4, STA; see also section 4-1 of the Securities Regulations):

  • Time of the transaction.

  • Number of shares transferred.

  • Whether the transaction refers to the person notifying or a related party.

  • Percentage of shares and votes held by the shareholder after the transaction.

  • Percentage of shares and votes held by the shareholder in the form of rights to shares after the transaction, and information about exercise dates for warranties and options.

In a stakebuilding exercise, the following matters will also be of relevance to disclose:

  • Related and associated parties. Shares owned by related or associated parties will be considered owned by the shareholder such as (Chapter 6, STA):

    • spouses;

    • co-habitants;

    • underage children;

    • companies within the same group;

    • companies in which the shareholder holds shares representing more than 50% of the voting rights; or

    • parties acting in concert with the shareholder in exercising the rights attached to the shares, or in frustrating or preventing a bid.

  • Borrowing and lending of shares. For the purpose of the disclosure obligations, the borrowing of shares is treated as an acquisition, and lending may, depending on the circumstances, be treated as a sale.

  • Officers of the company. Any members of the board, the control committee, senior management and auditors associated with a company whose shares are traded on a regulated market, must notify the OSE, if such persons buy, sell or subscribe to shares in the company (sections 3-6, 4-1, STA). The same disclosure obligations apply to companies owning shares in the target and as a result are represented on the target's board. This obligation also applies to the purchase and sale of, and subscription for, derivatives and to trading by related persons (see above). Notification must be made immediately, and no later than by the start of trading the day following the transaction.

Anyone subject to the above notification requirement must submit to the OSE a list of associated persons who own shares or derivatives in the relevant listed company. The above rules apply to targets incorporated in Norway, and foreign targets with Norway as their home state. Other disclosure rules and thresholds may apply to foreign-incorporated targets or targets resident in other jurisdictions.

Cash consideration

If a bidder, prior to launching a voluntary offer, pays cash during the stakebuilding exercise, there is no requirement that a later voluntary offer must be made in cash. However, for mandatory offers, an option for complete payment in cash must always be offered.

Timing restrictions

There is no limitation on the time period during which a stake can be built or its speed.

Requirement for a mandatory offer

A duty to make a mandatory offer is triggered during stakebuilding on a transfer of shares where the acquirer obtains (directly or indirectly, or through consolidation of ownership) control of one third of the votes in a listed company (see Question 16).

Takeovers of financial institutions

There are no specific provisions in the STA which regulates offers to acquire financial institutions. However, the current Norwegian Financial Institution Act (Finansieringsvirksomhetsloven) (including as set out in a replacement Act (Finansforetaksloven) which will take effect from 1 January 2016), provides that acquisition of shareholdings in a Norwegian financial institution exceeding 10% ownership is subject to ownership control, must be notified to the FSA and requires approval from the Ministry of Finance (see box, The regulatory authorities). Approval is also required if the ownership exceeds 20%, 30% and 50%. Approval may be withheld if the new owner is not deemed "fit and proper" as owner of such an institution. This will ultimately be decided by the Ministry of Finance.

 

Agreements in recommended bids

9. If the board of the target company recommends a bid, is it common to have a formal agreement between the bidder and target? If so, what are the main issues that are likely to be covered in the agreement? To what extent can a target board agree not to solicit or recommend other offers?

If a bidder can secure the target's support, the bidder will frequently seek to enter into a formal agreement with the target to document the tender offer in greater detail and record the target board's formal agreement to support the bid. These agreements typically also include provisions on how to conduct the due diligence process and the timetable for the bid. Until the offer is settled, targets may, in such agreements, also consent to abide by certain customary covenants, such as:

  • Conducting its business in the usual way.

  • Not altering in any manner the share capital of the target.

  • Not taking, or omitting to take, any action that could frustrate the launch and completion of an offer.

Such transaction agreement may also include certain customary and limited representations and warranties by the target. It is also quite common that a bidder will seek to include certain deal protection measures into such agreements, for example break fees, matching rights and non-solicitation (no-shop) provisions. Such support agreements can take various forms, and sometimes these issues can be dealt with in one, or in separate agreements. The Code recommends that a target's board exercise great caution in agreeing to any form of exclusivity. A commitment by the target's board not to recommend any other offers (despite these offers being higher) could conflict with the board's fiduciary duties to the target's shareholders.

In exchange offers structured as the merger of equals, it is common for the parties to enter into a combination or merger agreement. In the event the bidder and the target's board of directors enter into an agreement as set out above, the OSE will normally require the target company to obtain an independent valuation of the bid from an independent expert on behalf of the board (see Question 12).

 

Break fees

10. Is it common on a recommended bid for the target, or the bidder, to agree to pay a break fee if the bid is not successful?

Break fees, inducement fees, work fees and similar fees (where the target undertakes to pay a fee to a bidder if the transaction is not completed) are not prohibited.

Historically, these types of fees were less common in Norwegian M&A transactions compared to many other jurisdictions (especially in public takeovers). However, in the last ten years, break fees have increased in popularity, and gained more and more acceptance in Norwegian public M&A transactions. During this period, the size of the break fees remained at the lower end compared to certain other jurisdictions, and very often these fees took the form of cost coverage arrangements. Structures with excess fees could, however, occasionally be seen, particularly in cross-border deals with bidders domiciled in the US or UK. Break fees payable by the target can raise issues in relation to compliance with the target's corporate interests and may in the worst case trigger liability for misuse of the target's assets.

The Code (see Question 4) recommends that a target's board must exercise great caution in agreeing to any commitment that makes it more difficult for competing bids to be made from third-party bidders or may hinder any such bids. Such commitments, including commitments in respect of exclusivity (no-shop) and in respect of financial compensation if the bid does not proceed (break fees), should be clearly and evidently based on the shared interests of the target company and its shareholders. The Code further recommends that any agreement for break fees to be paid to the bidder should, in principle, be limited to compensation for costs incurred by the bidder in making the bid. In 2014, break fees were agreed in 20% of the M&A offers launched in the Norwegian market. However, none of the public M&A deals announced during the first half of 2015 have so far contained any break fee provisions in the transaction agreement.

 

Committed funding

11. Is committed funding required before announcing an offer?

The consideration offered in connection with a mandatory offer must be unconditionally guaranteed (selvskyldnergaranti) by either a bank or an insurance undertaking, in each case authorised to conduct business in Norway (section 6-10, STA). This means that any debt financing the bidder relies on must, in practice, be agreed on a "certain funds" basis, so that it does not include any conditions that are not effectively within the bidder's control (see Question 13).

The Securities Regulations contain detailed provisions on settlement guarantees in mandatory offers. Such settlement guarantees must be (among other things):

  • For the benefit of the shareholders accepting the offer.

  • For a minimum amount corresponding to the offered cash price per share multiplied by the total number of shares that are tendered form, plus the applicable standard default interest for four weeks.

  • Approved by the OSE in advance of announcing the offer, and a copy must be included into the offer document.

For voluntary tender offers there are no similar or firm committed funding requirements in place under Norwegian law. Such offers can, in principle, also have condition precedents regarding financial guarantees or commitments, but the offer document must always include information on how the acquisition is to be financed.

Following a notice to the minority shareholders of a squeeze-out, a bidder must also deposit the consideration into a separate account with a bank authorised to conduct business in Norway. In the event that the bidder can acquire more than 90% of the shares and the votes through a voluntary offer for a Norwegian listed company, the bidder may proceed to squeeze out the remaining shareholders, without first having to issue a mandatory offer, provided the price offered to the remaining minority shareholders is not lower than it would be in the case of a mandatory offer (see Question 18). However, in these situations, the bidder must still come up with a similar settlement guarantee as for mandatory offers.

 

Announcing and making the offer

Making the bid public

12. How (and when) is a bid made public? Is the timetable altered if there is a competing bid?

Announcing a bid

Once the bidder has decided to make a voluntary offer for a target listed on the OSE or Oslo Axess, it must immediately notify both the target and the OSE. Both the target and the bidder must then inform their employees (section 6-19, STA). OSE will immediately make the notification public through an announcement on www.newsweb.no.

In the case of a mandatory bid situation, the bidder must inform the OSE as soon as the mandatory bid obligation has been triggered (that is, by the bidder passing the relevant thresholds) (see Question 16).

Both hostile and recommended bids are regulated by Chapter 6 of the STA, irrespective of whether the bids are mandatory or voluntary. There are, however, important differences that apply to the procedures for a mandatory and a voluntary bid.

Offer document

In acquisitions of publicly listed companies, the OSE (and, in the case of an exchange offer, the FSA if a prospectus is required) must approve the offer and the offer document before it is published, and any amendments being made to the offer during the offer period, before it can be launched. The approval process usually takes one to two weeks unless difficult issues are encountered or OSE discovers mistakes or discrepancies in the document. Once approved, the document is distributed to all shareholders with known addresses, and must also be made known to the target's employees. A target company is obliged to co-operate with the bidder to facilitate the distribution, irrespective of whether the bid is recommended or hostile, voluntary or mandatory.

Offer period

The offer document must state the period for acceptance of the bid, and publishing it triggers the offer period. In voluntary tender offers, the offer period must be no less than two weeks and no more than ten weeks. For a (subsequent) mandatory offer the period must be at least four weeks and no more than six weeks.

A bidder can issue a new mandatory bid, provided this is approved by the OSE. If approved, the offer period must be extended for at least two weeks after the new offer is made. A new offer will often be made when a competing bid has been launched during the offer period.

For voluntary offers, a three to four-week period is typically used as the initial offer period. However, shorter periods may also be used, in particular if there is a risk of competing bidders emerging. Occasionally, a substantial longer offer period may be needed, typically due to conditions for the bid being delayed, for example, necessary approvals from government authorities in cases where the target is a financial institution, or in situations involving complex competition-clearance issues.

Board of directors' statement

If a Norwegian listed company becomes the subject of a public takeover bid, the target's directors have an explicit obligation to evaluate the terms of the bid and issue a statement to its shareholders describing the board's view on the advantages and disadvantages of the bid. This statement must include the:

  • Board's view on the effects of implementing the bid on the target's interest.

  • Bidder's strategic plans for the target and any likely repercussions on employment.

  • Locations of the target's places of business.

If the CEO or any directors are shareholders, this must also be stated, together with their decision on acceptance. The statement must further include information on how the bid is viewed by the target's employees. Employees are entitled to prepare their own statement on the bid's effect on employment in the target, which, if given to the board within reasonable time from when the offer was submitted, shall be attached to the aforementioned board statement.

According to the Code (which goes beyond the requirements of the STA), it is recommended that the target company's board arrange a valuation by an independent expert for each and every bid and make a recommendation to shareholders on whether or not to accept the offer. Exemptions apply in situations where a competing bid is made. If the board consider itself unable to make a recommendation, it must provide reasons. Some of the target's directors may be disqualified from participating in issuing the board statement. If all the directors are disqualified, the OSE can appoint an independent evaluator to prepare and issue the statement instead of the target's board. The OSE will usually require a statement from an independent evaluator where the target's board has entered into a transaction agreement with a bidder for whom the board has undertaken an obligation to recommend the bid.

The board's statement must be issued no later than one week before the day the bid expires (section 6-16, STA) and must be sent to the OSE and made available for the shareholders and employees. If the target board's position is known when the offer document is finalised, the board's statement can also be incorporated into the offer document as an attachment. This never occurs in a hostile takeover situation. It is more common that the target's board will announce a negative statement as early as possible after a hostile bid is announced.

Acceptance conditions

It is quite usual that a voluntary offer document requires a certain minimum number of acceptances, typically two-thirds or more than 90% of the votes and the share capital, as a condition for the bid to proceed. If so, the bidder will normally allow such conditions to be waived at the bidder's own discretion. A mandatory offer cannot be subject to any form of minimum acceptances (or other conditions).

Interruptions to the timetable

In the event of a competing bid being launched, the timetable can change. A revised offer requires approval from the OSE and the offer period must be extended so that at least two weeks remain. Other events that can typically cause delays in the completion of a voluntary bid include waiting for conditions to be satisfied.

Settlement

In terms of settlement, the bidder must engage a bank or a dealer-broker firm to handle acceptances, clearance and settlement in connection with a tender offer process and the settlement in a subsequent compulsory acquisition or squeeze-out. In case of a mandatory bid, settlement must take place as soon as possible and not later than 14 days after the bid period expires. In a voluntary offer, the settlement takes place in accordance with the terms of the bid, normally a few days after the date that all conditions of the offer are fulfilled (or waived). The shares and the consideration are normally simultaneously transferred and registered in the public securities register by the securities department of a Norwegian bank, or a firm of dealer-brokers.

 

Offer conditions

13. What conditions are usually attached to a takeover offer? Can an offer be made subject to the satisfaction of pre-conditions (and, if so, are there any restrictions on the content of these pre-conditions)?

Voluntary offers

In a voluntary tender cash offer or exchange offer for a listed company there is, in general, no limitation law as to which conditions such an offer may contain. A voluntary tender offer may be launched at the bidder's discretion. The bidder can also choose to make the offer to only some of the shareholders. One or more of the following conditions may be included in a voluntary offer:

  • Receiving acceptance of the offer from a certain minimum of the existing shareholders (for example, more than 90% or two thirds of the shares and votes).

  • Regulatory filings and notifications being made in relevant jurisdictions, and all necessary approvals and clearances, including competition clearances obtained on terms acceptable to bidder.

  • No withdrawal of board recommendation.

  • Completion of a satisfactory due diligence investigation.

  • No material adverse change for example in activity, financial situation or future prospects.

  • No issuance of new shares, warrants or options.

  • No dividends or other distributions.

  • All authorisations relating to the target's business are in full force and effect.

  • Target not taking any frustrating action.

  • Absence of any higher competing offer.

  • Compliance with term of transaction agreement, if relevant.

  • Absence of any material litigation.

  • The listing of any shares that are offered as consideration by the bidder.

  • Certain events affecting the target not occurring, including:

    • insolvency;

    • changes caused by defensive measures.

A voluntary offer can also be made subject to a financing condition although this is rare. Whether to include the whole gamut of conceivable conditions, or to only include limited conditions in order to complete the transaction quickly and avoid competing bids, lies entirely within the bidder's discretion and can vary widely.

Mandatory offers

A mandatory offer cannot be made subject to conditions (section 6-10, STA).

 

Bid documents

14. What documents do the target's shareholders receive on a recommended and hostile bid?

Bidder's documents

There are a number of key documents involved in a public takeover bid common to both a recommended and a hostile bid. The key documents that the target's shareholders will receive from bidders in public takeover bids are as follows:

  • Notification of the bidder's decision to make an offer.

  • Publication of this notification by the OSE.

  • An offer document (or a prospectus or equivalent document if applicable, see Question 12 and below).

  • An acceptance form.

  • The bidder's announcement of the result of the offer.

The offer document must be prepared by the bidder and distributed to all shareholders in accordance with the provisions of the STA (section 6-13, STA). In all material respect, the offer document will be the same irrespective of a bid being recommended or hostile, mandatory or voluntary. The offer document must describe the offer together with correct and complete information and description on matters of significance for the evaluation of the offer including, in essence, the following:

  • Bidder's name, address, type of organisation.

  • Information on any related parties (as defined in the STA), including such parties' relationship with the bidder and the existence of any shareholders' agreements.

  • Shares and convertible loans owned by the bidder or any related parties.

  • The consideration and method used to establish the consideration, the means of and time limit for settlement, and details of guarantees for settlement of the bidder's obligations.

  • The principles underlying the valuation of asset items offered as settlement, including information on factors to which importance must be given when deciding whether to subscribe or acquire securities.

  • The period for accepting the bid and method of acceptance.

  • The financing of the bid.

  • Incentives agreed or promised to members, target's management or governing bodies.

  • What contact the bidder has had with the target's management or governing bodies prior to launching the bid.

  • The purpose of the takeover, plans for future operation, planned reorganisation of target and its group companies.

  • The impact of the takeover for the target's employees and any related labour effects.

  • The legal and tax consequences of the bid.

  • The largest and smallest proportion of shares that the bidder undertakes to acquire.

  • Information on compensation offered to set aside rights under Directive 2004/25/EC Article 11, ref Article 12(2).

  • Law and venue applicable to the sale of shares tendered under the bid.

In a mandatory offer, the bidder must obtain a bank guarantee confirming its ability to settle the consideration offered in full (see Question 11). The guarantee must be issued by one or more financial institutions authorised to provide such guarantees in Norway, and submitted to and approved by the OSE before announcing the bid.

In a share-for-share offer (irrespective of whether or not the bidder or target is listed), there will generally be a requirement to publish a combined prospectus and offer document in accordance with the more detailed rules set out in Chapter 7 of the STA. This obligation will be triggered if such an offer is addressed to 150 or more persons in the Norwegian securities market, and involves at least EUR1 million calculated over a 12-month period. There are some exceptions to this obligation. Bids that involve issuing shares above EUR1 million and less than EUR5 million are now subject to simplified requirements of a national prospectus to be filed with the Norwegian Register of Business Enterprises. However, bids that involve issuing shares with a value at or exceeding EUR5 million, directed to 150 persons or more, will be subject to the requirements of a full prospectus in line with the contents requirement set out in the EU Prospectus Directive. Such combined prospectus and offer document must be inspected and approved both by the OSE and the Norwegian FSA.

Additional press announcements and supplements to the offer document or prospectus may be required, if the bidder for instance wants to increase the offer consideration. In a hostile bid, the number and style of additional documents can vary greatly and the parties are likely to publish a series of revised offers, additional announcements or (sometimes) circulars.

Target's documents

The target must issue the following document:

  • The target board's response statement (see Question 12) which also must refer to the target employees' views on the offer.

  • If relevant, the employees' own statement on the offer's effect on employment in the target (see Question 15)

The target's board must consult with the employees before making their statement regarding the offer. In a recommended takeover situation, the board's statement is sometimes attached to the offer document, but not always. In a hostile situation, the target may present additional press releases and defence documents to the target's shareholders.

 

Employee consultation

15. Are there any requirements for a target's board to inform or consult its employees about the offer?

On receiving an offer document in a public tender process, the target's board of directors must present a public statement with the board's reasoned evaluation of the offer. This includes the anticipated effects of the bidder's strategic plans, its location of business, and the impact on the target's employees (including their benefit and pension schemes). The target's board will have to consult the employees before they prepare such a statement (see Question 12, Board of directors' statement). The employees' views must be referred to. The employees are entitled to prepare their own statement which, if given to the board within a reasonable time from when the offer was submitted, must be attached to the board's statement. The board's consultation is often carried out through the employees' representatives on the board.

 

Mandatory offers

16. Is there a requirement to make a mandatory offer? If so, when does it arise?

If a bidder directly, indirectly, or through consolidation of ownership (following one or more voluntary offers) acquires more than one third of the votes in a Norwegian target company listed on a Norwegian regulated market (or in a foreign company listed in Norway but not in its home country), it must make a mandatory offer for the remaining outstanding shares.

Certain exceptions do apply, the most practical being when shares are acquired as consideration in mergers and demergers. After passing the initial one third threshold, the bidder's obligation to make a mandatory offer for the remaining shares is repeated when it passes 40% and then 50% of the voting rights (consolidation rules apply). The repeated offer obligations do not apply if the thresholds are passed during issuing a mandatory offer. Further, certain derivative arrangements (for example, total return swaps) may be considered as controlling votes in relation to the mandatory offer rules. This means that a combined acquisition of shares and derivatives can, under certain circumstances, trigger a mandatory offer obligation, even though the bidder owns less than one third of the shares. If a bidder acquires more than 50% of the voting rights in a company owning more than one third of the shares in a company whose shares are admitted to trading on a regulated market in Norway, this can trigger a mandatory offer obligation if the owner company's principal business consists of holding such shares in the listed company.

Consolidation rules apply for shares held by certain affiliates and closely related parties. Hence, the combined holdings of both the acquirer or disposer and such party's close associates are relevant when deciding if the mandatory offer obligation has been triggered (see Question 8).

When entering into a transaction that triggers the mandatory offer rules, the purchaser must immediately notify both the company and OSE about the acquisition and inform whether it intends either to:

  • Resell all or part of the shares. The purchaser can avoid the mandatory offer obligation by selling the shares exceeding the relevant threshold within four weeks.

  • Make an offer for the remaining shares. The purchaser must prepare a mandatory offer document and cannot at a later stage retract and amend its intentions to be a sale of shares instead.

 

Consideration

17. What form of consideration is commonly offered on a public takeover?

Cash is the most commonly used consideration in connection with acquisitions of listed companies in Norway. In 2014, none of the bids launched included a share component, while in 2013, only 9% of the total public M&A volume offered a consideration of either shares or combined shares and cash. None of the bids that offered shares in 2013 reached to completion stage.

Shareholders normally prefer to be paid in cash. In addition, it is far more complex for a bidder to offer settlement in shares, due to the amount of information that is required to be published and the process for finalising the bid documentation. If the consideration in an acquisition is offered as cash, it will be sufficient for the bidder to prepare a more or less standardised offer document.

If, however, transferable securities (typically shares) are offered as consideration, the bidder must obtain the necessary corporate resolutions to issue the securities. Further, in the offer document (or in a supporting document attached to that) the bidder must include information equivalent to that included in a prospectus (that is, all the qualified information, including, among other things, any special circumstances that can be attributed to the bidder or the nature of the securities being offered, that are necessary for an investor to make a properly informed assessment of:

  • The issuer's and any guarantor's financial position and prospects.

  • The rights attaching to the securities in question.

This prospectus or offer document must be reviewed by the Norwegian FSA (in addition to the OSE). Consequently, the structure of share-for-share offers will typically be more complex. This is also owing to the fact that the securities offered as consideration are or will be admitted to trading (and will therefore fulfil the criteria for liquidity) only upon the closing of the offer. Thus, the admission process for the offered securities must be carefully aligned to ensure that these securities are liquid at the point of the closing of the offer. Further, such an exchange offer may require registration statements and other filings in foreign jurisdictions. The choice of consideration is often complex, since it may have substantially different consequences for the parties.

A bidder must therefore decide, quite early in the process, if it intends to offer cash, securities or a mixture of these in connection with a takeover bid. Relevant factors include:

  • The bidder's ability to pay cash or obtain loan financing.

  • Tax considerations (see below).

  • The demand for the shares.

  • The outlook for the price of shares or financial instruments received. Sellers have often seen the share price of consideration received fall after the transaction became known in the market, in particular if the market believes that the price paid was too high.

  • If the buyer is a listed company, what effect (if any) the choice of consideration may have on its own stock prices.

  • Any limitations that will prevent the sellers from owning property or securities offered as consideration.

  • Accounting effects.

  • Any statutory limitations or rules if the consideration includes shares or other financial instruments, for example prospectus rules, licence and/or documentation requirements.

Mandatory offers

In a mandatory takeover offer situation, the STA prescribes that the consideration must be in cash. However, it is possible to offer alternative forms of consideration, (namely shares in the bidder), provided that an option to receive the total offer price in cash is made available and that this option is at least as favourable as the alternative settlement.

Voluntary offers

For voluntary tender offers there are, in general, no statutory limitations under Norwegian law as to what type of consideration (cash, in-kind, share-swap, or a combination) can be offered to the shareholders. If the voluntary offer triggers a subsequent mandatory offer, the mandatory offer must contain an offer for cash consideration. This means that a non-accepting shareholder in the voluntary offer can later accept a cash offer as an alternative. The bidder must ensure that all shareholders are treated equally in connection with the voluntary tender offers. If the target has different classes of shares, the bidder can take this into consideration and a reasonable difference in the offer price is allowed.

Tax issues

Norwegian shareholders that are limited companies and certain similar entities (corporate shareholders) are generally exempt from tax on dividends received from, and capital gains on the realisation of, shares in domestic or foreign companies domiciled in EU and EEA member states. Losses related to such realisation are not tax deductible.

A listed company can also be acquired through a tax free statutory merger in return for the shareholders in the target company receiving shares as consideration. Such statutory merger is tax exempted both for the shareholders and the merging companies. To qualify as a tax exempted merger, all companies in the merger must, as a main rule, be domiciled in Norway (see Question 2) and the conditions in the Norwegian Tax Act must be met.

A cross-border merger or share swap is as a main rule, treated as realisation of the target's shares and is subject to capital gains tax, unless both companies are located within the EU or EEA and the conditions for tax exemption are met. From 2011, cross-border mergers and demergers between Norwegian companies and a company domiciled within the EU or EEA (subject to certain conditions being fulfilled) can now be carried out as a tax-free merger or demerger under Norwegian law. However, if these conditions are not met, a cross-border merger and share swaps can only be carried out on a tax free basis if the Norwegian Ministry of Finance approves to grant a tax exemption, but such exemptions are not granted automatically.

 
18. Are there any regulations that provide for a minimum level of consideration?

There is a substantial difference between voluntary and mandatory bids.

Voluntary offers

For voluntary offers, the bidder is free to offer whatever price it wishes, and there are no statutory provisions regarding minimum consideration. However, to make the offer attractive, it is common to add a 20% to 40% premium on the current share trading price. In previous years, there have been considerable variations in the level of premiums offered in voluntary offers, with some examples reaching premiums of 60% above the average trading price of the preceding 30 days. However, the bidder must treat all shareholders equally in the offer.

Mandatory offers

In a mandatory offer, the share price offered cannot be lower than the highest price paid or agreed to be paid by the bidder for shares (or rights to shares) in the company during the last six months.

The STA provides that the takeover supervisory authority (that is, the exchange where the securities are listed) can demand that market price is paid for the shares if it is clear that the market price at the time the mandatory offer obligation was triggered exceeds the price offered. The rule has primarily been invoked in situations where the main rule has been considered abused, for example in situations where the bidder has been using options with a low subscription price prior to exceeding the mandatory bid thresholds. However, as the STA provision does not provide sufficient guidance on how this market price is to be calculated, an EFTA-court ruling from 2010 found the rule to be non-compliant with the EU takeover rules.

 
19. Are there additional restrictions or requirements on the consideration that a foreign bidder can offer to shareholders?

There are no specific restrictions on the form of consideration that a foreign bidder can offer to shareholders. Domestic and foreign bidders are treated equally in this respect. However, for non-EU/EEA companies a tax free merger with a Norwegian listed company will not be possible unless the Norwegian Ministry of Finance approves the grant of a tax exemption (see Question 17, Tax issues).

 

Post-bid

Compulsory purchase of minority shareholdings

20. Can a bidder compulsorily purchase the shares of remaining minority shareholders?

Action prejudicing minority shareholders

A shareholder cannot exercise its majority powers in a Norwegian company at board or management level or at the target's meeting of shareholders, in a manner that is likely to cause unjust enrichment to a shareholder or a third party at the cost of the company or another person. This is a general principle of corporate legislation, and is explicitly set out both in section 5-21 and section 6-28 of the Norwegian Public Limited Liability Companies Act. A court can overrule any board resolutions and any resolutions issued by a shareholders' meeting that violate this principle.

Squeeze-out provisions

A majority shareholder or bidder that directly or indirectly acquires ownership to more than 90% of a Norwegian target company's shares and voting rights can adopt a resolution by its own board of directors resolving to squeeze out the remaining minority shareholders by a forced purchase at a redemption price. Such resolution must be notified to minority shareholders in writing, and registered in the Norwegian Registry of Business Enterprises. A deadline may be fixed, which cannot be less than two months, within which time the individual minority shareholders can make objections to or reject the offered price. The acquirer becomes the owner of (and assumes legal title to) the remaining shares, immediately following a notice issued to the minority shareholders of the squeeze-out and the price offered, and the depositing of the aggregate consideration in a separate account with an appropriate financial institution.

Minority shareholders who do not want to accept the redemption price per shares offered, are protected by appraisal rights that allow shareholders to seek judicially determined consideration for their shares, at the company's expense. The courts decide the actual value of the shares. In determining the actual value, the starting point for the court is to establish the underlying value of the company divided equally between all shares (virkelig verdi). However, if the squeeze-out takes place within three months of the expiry of the public tender offer period for a listed company, the price is fixed on the basis of the price offered in that tender offer, unless special grounds call for another price (section 6-22, STA).

Minority shareholders (holding less than 10%) have a corresponding right to demand the acquisition of their shares by a shareholder with a stake of more than 90% of the target's shares.

 

Restrictions on new offers

21. If a bidder fails to obtain control of the target, are there any restrictions on it launching a new offer or buying shares in the target?

There are no rules under Norwegian law that prevent a bidder from launching new bids for the target's shares, in case the initial bid fails (irrespective of reasons), unless a bidder has entered into an agreement or any other type of specific arrangement with the target, its shareholders or any third party that prohibits a new bid from being launched during a specific time period. However, any new bid or amendments to an existing bid must be approved by the OSE prior to announcement.

 

De-listing

22. What action is required to de-list a company?

An issuer that proposes to cancel its listing either on the OSE or on Oslo Axess, must first convene a shareholders' meeting to adopt a resolution to apply for de-listing. The resolution must be approved by at least two thirds of the issuer's share capital and voting rights present at such shareholders' meeting. If the resolution is adopted by the shareholders' meeting, the issuer can apply to the OSE for de-listing. However, the formal decision to de-list is made by the OSE.

Whether a target after a takeover bid can be de-listed from the OSE or from Oslo Axess, depends on the size of the shareholding the bidder has acquired:

  • Where the bidder owns more than 90% of the shares and the votes in the target, it is normally a straightforward process to have the target company de-listed from the OSE or Oslo Axess. The de-listing is a simple administrative decision by the OSE.

  • Where the bidder has not become the owner of more than 90% of the shares and the votes in the target, the situation is more complex. OSE considers the minorities' interest, including the number of remaining shareholders, when making its decision. It may be substantially more challenging to have the OSE approve an application to de-list the target even when the bidder has managed to acquire more than 80% of the votes but less than 90%. For example, following a mandatory bid for Evry ASA by Apax Partners in 2014, the bidder holds about 88% of the issued shares in Evry and applied the OSE in 2015 for a de-listing of Evry's shares from the OSE following a shareholders' resolution in Evry. The application was declined by the OSE. Evry is currently considering whether to appeal to the OSE Appeals Committee.

 

Target's response

23. What actions can a target's board take to defend a hostile bid (pre- and post-bid)?

Pre-bid defences

Taking action to frustrate a potential offer may constitute a breach of the directors' duties to act in the best interests of all shareholders and the target as a whole. A board will, according to statutory provisions, also be prohibited from taking action that benefits only some shareholders at the expense of others. In addition, the STA substantially reduces the ability of Norwegian target's board to adopt active measures to defend against a takeover bid after the target has been informed that a voluntary or mandatory bid will be made (section 6-17, STA).

However, there are few restrictions on the use of defensive tactics before a bid is announced if the board's general fiduciary duties towards the company and its shareholders are observed. A potential target could, for example, introduce:

These measures may conflict with the Code and also require shareholder approvals.

Restrictions in articles

A potential target company could propose to amend its articles, for example by introducing:

  • Special criteria that shareholders must fulfil to own shares in the company.

  • Lower levels for triggering mandatory bids.

  • Maximum voting rights, although these are rare in listed companies.

  • Special voting rules.

  • Different classes of shares, for example non-voting preference shares.

These resolutions would require approval by the potential target's shareholders' meeting and the support of two thirds of the capital and votes attending the relevant meeting. If the target wants to introduce different classes of shares by altering the rights of already issued shares this requires the shareholders' unanimous approval. However, issuing new classes of shares with different rights may be possible, depending on the circumstances, with support from two thirds of the capital and votes. The OSE monitors and restricts such resolutions if they are not consistent with the suitability test for listings.

Poison pills

More advanced US-style shareholders' rights plans or other poison pills are currently not common in the Norwegian market. However, in principle Norwegian companies could introduce super-majority provision in their articles so that certain resolutions must be passed by a larger majority than set out in the Norwegian Public Limited Liability Companies Act. A potential target company could also, in their articles, determine that the mandatory bid provision applies at a lower threshold than one third. However, these requirements are not common. By introducing a lower threshold this prevents an acquirer from building a large stake in the target before issuing an offer.

Change of control clauses

A target can also be protected from hostile takeovers through change of control provisions in the target's commercial contracts. A change of control clause is typically found in the target's financing agreements, property leases, and other commercial contracts (for example, joint venture agreements, contracts with major suppliers or customers depending on the target's industry). It allows a party to terminate its contract with another party, in case there is a change of ownership to the majority of shares in the other party.

Stakebuilding

It is normal for the target's board to ensure that it has continued access to detailed information about any changes in the target's shareholder structure for the purpose of initiating defence strategies as soon as potential stakebuilders or bidders are identified.

It is possible for a potential stakebuilder or bidder to hide its identity from the target by using various types of derivative instruments, or through nominee accounts (see Question 8, Disclosure obligations). The list of a company's shareholders in a Norwegian company must be available to anyone, and the target is obliged to provide this information not only to the shareholders, but anyone who requests it.

Stealth accumulations through stakebuilding in Norwegian listed companies do, however, face certain challenges, such as the 5% disclosure requirement imposed by the STA. As a result it is not uncommon for takeovers attempts to be launched at weekends. The potential bidder will seek undertakings from shareholders between the close of the OSE on a Friday and the market opening the following Monday. Alternatively, this can be done at any other day of the working week if less time is needed, by seeking the same undertakings between closures of the market and opening of the market the next day.

Post-bid defences

After a public bid has been issued, or after the target has been informed that a bid will be made, the target's CEO's and board's ability to initiate defensive measures are restricted (section 6-17, STA). From this moment, they can no longer make or propose to make decisions in regard to:

  • Issuance of shares and other financial instruments.

  • Merger of the target or any of its subsidiaries with a third party.

  • Sale or purchase of significant areas or operations, or dispositions of material significance to the nature and scope of the target's operations.

  • Carrying out share buy-backs.

These restrictions do not, however, apply to disposals that are part of the target's normal business operations. Also, note that these restrictions do not apply if the shareholders' meeting has adopted a resolution authorising the board or the CEO to take such actions with the takeover-situation in mind. As a result, a number of Norwegian listed companies have adopted defensive measures such as pre-authorising share capital increases and/or share buy-backs to be utilised by the board in potential takeover situations.

Despite the above restrictions, the target board is not obliged to facilitate the bidder's offer or assist the bidder in obtaining regulatory approvals. Subject to the board's duty to act in the best interests of the target and its shareholders, and promote the success of the target, it is, in most cases, considered acceptable for the target's board, in response to an unsolicited offer to (among others):

  • Argue against the offer.

  • Refuse the bidder due diligence access.

  • Publish a defence document.

  • Lobbying against the competition authorities clearing the transaction.

  • Seek a "white knight" (friendly alternative bidder), a white squire (friendly shareholder with blocking position) or explore other alternatives.

  • To announce financial information and forecasts not previously disclosed.

  • Initiate a Pac-Man defence (acquisition of shares in the bidder).

  • Making dividend payments.

 

Tax

24. Are any transfer duties payable on the sale of shares in a company that is incorporated and/or listed in the jurisdiction? Can payment of transfer duties be avoided?

A bidder is not liable to pay stamp duty or any type of transfer taxes on the acquisition of shares in a Norwegian target company.

 

Other regulatory restrictions

25. Are any other regulatory approvals required, such as merger control and banking? If so, what is the effect of obtaining these approvals on the public offer timetable?

On 1 January 2014, the newly amended Norwegian merger control regime entered into force. Norwegian competition law provides for merger control similar to most European jurisdictions. A business combination or an acquisition must be notified to the NCA before completion, provided the companies involved exceed certain turnover thresholds in Norway (see below, Thresholds). The transactions are suspended until clearance (standstill obligation). Notification may also be required under the Competition Act (or under the EU merger control regime) if the parties sell to Norwegian customers, even if none of them are established in Norway.

Notification is not required unless there is an acquisition of lasting control. Control is constituted by rights, contracts or any other means that, either separately or in combination, and having regard to the considerations of fact or law involved, confer the possibility of exercising decisive influence on an undertaking, in particular by ownership or the right to use all or part of the assets of an undertaking, or rights or contracts that confer decisive influence on the composition, voting, or decisions of the decision-making bodies of an undertaking. An acquisition of minority shareholdings that do not confer control is not subject to notification. However, the NCA still has power to intervene against an acquisition or concentration (even if it does not lead to control) that has effect or is liable to have effect in Norway, provided the Competition Act's material and procedural conditions for intervention apply. If so, the NCA must order the submission of a complete notification no later than three months after the date of a final acquisition. The NCA may also, within two years from the date of the most recent acquisition, intervene against a successive transaction that has taken place, if the substantive condition for intervention is fulfilled. Consequently, it is always advisable to carry out a thorough assessment of the potential risk of intervention by the NCA before launching any public offers in the Norwegian market.

Thresholds

Historically, the Norwegian turnover thresholds have been considered very low compared to most other jurisdictions. However, from 1 January 2014, a concentration must be notified to the NCA if all of the following apply:

  • The undertakings concerned on the target side have a group turnover in Norway exceeding NOK100 million.

  • The acquirer has a group turnover in Norway exceeding NOK100 million.

  • The combined group turnover of the acquirer and the target in Norway is NOK1 billion or more.

In addition, the new rules contain amendments concerning the entities included when calculating the parties' group turnover, to harmonise with Regulation (EC) 139/2004 on the control of concentrations between undertakings (Merger Regulation). The NCA also has the power to issue decrees ordering that business combinations falling below these thresholds must be notified, if it has reasonable cause to believe that competition is affected, or if other special reasons call for investigation. A decree must be issued no later than three months from the date of the transaction agreement, or from the date control is acquired, whichever comes first.

Notification procedure and suspension requirement

From 1 January 2014, the former Norwegian two-legged notification procedure was abolished. Instead of the former system with standardised notifications possibly leading to complete notifications, the new regulation introduced a new type of more comprehensive notification (more similar to a Form CO), but more limited in substance than the present "complete" filing form.

However, the Ministry also adopted a new simplified procedure for handling certain transactions that does not involve significant competition concerns within the Norwegian market. This is a type of short-form notification similar to the EU system. The simplified procedure covers:

  • Joint ventures with no or de minimis actual or foreseen business activities within Norway (a turnover and asset transfer test of less than NOK 100 million is used to determine this).

  • The acquisition of sole control over an undertaking by a party who already has joint control over the same undertaking.

  • Concentrations under which one or more undertakings merge, or one or more undertakings or parties acquire sole or joint control over another undertaking, provided that:

    • none of the parties to the concentration is engaged in business activities in the same product and geographic market (no horizontal overlap), or in a product market which is upstream or downstream from a product market in which any other party to the concentration is engaged (no vertical overlap); or

    • two or more of the parties are active on the same product or geographical market (horizontal overlap), but have a combined market share not exceeding 15% (horizontal relationship); or

    • one or more of the parties operates on the same product market which is upstream or downstream of a market in which the other party is active (vertical relationship), but none of the parties individually or in combination has a market share exceeding 25%.

As under the EU merger rules, an exemption rule, modelled on Article 7(2) of Regulation (EC) 139/2004 on the control of concentrations between undertakings, has been implemented into Norwegian law. This rule allows a public bid or a series of transactions in securities admitted to trading on a regulated market such as the OSE and Oslo Axess irrespective of the standstill obligation. A bidder can take title to the shares in such listed companies and issue a mandatory bid when obliged to do so according to the STA. The exemption operates when the acquisition is immediately notified to the NCA. "Immediately" normally means the day on which control is acquired. The acquiring party cannot at any time "exercise any form of control" over the target until the end of the standstill period following the filing. It has, however, been assumed that a bidder, during such standstill period, can use the voting rights to such shares to protect its investment without being in violation of the prohibition against exercising any form of control. Nevertheless, the bidder cannot start integrating and coordinating the target's future operations with the bidder's own operations.

Substantive test

The current substantive test under the Competition Act differs from that under the Merger Regulation (however, see Question 29). The Competition Act is based on a twofold test consisting of:

  • The substantial lessening of competition test (SLC).

  • An efficiency test.

Under the Competition Act, the Competition Authority will intervene against a concentration if it finds both that the:

  • Concentration will create or strengthen a significant restriction of competition.

  • Creation or strengthening of a significant restriction of competition is contrary to the purpose of the Competition Act.

However, the first limb of the SLC test will in most cases be interpreted in the same way as the "significantly impede effective competition" test in the Merger Regulation. The Competition Authority has also stated that the Commission's guidelines on the assessment of non-horizontal and horizontal mergers will provide guidance for the interpretation of the SLC test under Norwegian law. However, under Norwegian law any strengthening of competition in a market in which competition is already significantly restricted qualifies for intervention. Under the Merger Regulation, minor impediments of competition (measured with changes in the HHI before and after the concentration) normally do not qualify for intervention.

The Competition Authority only intervenes against concentrations that will create or strengthen a significant restriction of competition "contrary to the purpose of the Act". The purpose of the Competition Act is to encourage competition and contribute to the efficient use of society's resources (efficiency criterion). The NCA may not be entitled to intervene against a transaction if a restriction of competition results in efficiency gains that outweigh the disadvantages of reduced competition. Therefore, a concentration can be approved despite its negative effect on competition. A similar principle will also apply under the Merger Regulation provided merger specific and verifiable efficiency gains are produced to the benefit of consumers. Under the Merger Regulation a consumer welfare standard is applied by the Commission. However, under the Competition Act a total welfare standard will be applied.

Even if the conditions for intervention are met, the Competition Authority cannot intervene if an exemption applies for a well-functioning Nordic or European market and the concentration does not adversely affect Norwegian customers. The Government has also an opportunity, through the power of the King in Council to intervene in cases affecting "public principles or interests of major significance". In principle, this allows the Government to take broader political interests into account but in practice, this is unlikely. Note that the sitting Government most likely will propose to abolish the Government’s right to intervene based on broader political interests. Instead, it is expected that the Government will propose to appoint an independent complaints board for resolving complaints against decisions by the Competition Authority. Such change is expected to take place in 2016, subject to final approval by the Parliament.

Time limits

There is no deadline for filing a notification with the NCA, but a standstill obligation applies until the NCA has cleared the concentration. After receipt of the filing, the NCA has up to 25 working days to make its initial assessment of the proposed transaction, however, allowing for pre-deadline clearance, so that at any time during the procedure the NCA can state that it will not pursue the case further.

The NCA must, prior to the expiry of this deadline, notify the parties involved that a decision to intervene may be applicable (Phase II of the investigation). In such notification, the NCA must demonstrate that it has reasonable grounds to believe that the transaction will lead to or strengthen a significant restriction of competition that is incompatible with the intent behind the Norwegian rules. If the NCA issues a notice that it may decide to intervene, it has a basic period of 70 working days from the date the notice was received to complete its investigation and come to its conclusion on the concentration. This basic period can be extended under certain circumstances, however, the total case handling time may amount to 115 working days.

During the notification process, the parties have set deadlines for suggesting remedies. If the parties want to avoid Phase II of the investigations, remedies must be offered within 20 working days after NCA's receipt of the notification. If so, the Phase I of the investigation is extended by ten working days. During Phase II of the investigation, the parties may offer remedies within 55 working days after NCA's receipt of the notification to avoid a 15-working day extension of the NCA's deadline for a final decision.

All notifications are published on the NCA's webpage. The announcement on the webpage is also the NCA's confirmation that the notification has been received. Further information on notification is available on the Competition Authority website at www.konkurransetilsynet.no/ en/mergers-and-acquisitions/Obligation-to-notify-concentrations/.

 
26. Are there restrictions on the foreign ownership of shares (generally and/or in specific sectors)? If so, what approvals are required for foreign ownership and from whom are they obtained?

For most business sectors, there are no special requirements or restrictions with regard to foreign ownership of shares. Where restrictions exist they are of little importance in the context of companies whose shares are admitted to trading on a regulated market in Norway.

However, in certain sectors that govern vital national interests, such as the power and energy sector (including oil, gas and hydropower) and the finance sector (including financial, credit, and insurance institutions), there are more specialised rules regarding ownership and business operations. For most of these sectors (including the financial sectors), restrictions on ownership apply to all shareholders, domestic or foreign. As a member of the EFTA and the EEA, Norway must also adhere to anti-protectionism regulations adopted by these institutions.

 
27. Are there any restrictions on repatriation of profits or exchange control rules for foreign companies?

There are no restrictions on the repatriation of profits that apply to foreign companies in Norway. However, repatriation of profits may become subject to Norwegian tax, in particular withholding tax on dividends.

Except for certain mandatory reporting requirements, there are no exchange control restrictions for the transfer of funds to a foreign entity. However, the relevant Norwegian foreign exchange bank must notify Norges Bank, Norway's national bank, about payments between Norway residents and non-Norway residents. The Norway resident company must supply the foreign exchange bank with the information needed for such reporting purposes. The resident company is further obliged to notify Norges Bank of any establishment and activity in the accounts in a non-resident bank, or other forms of settlement arrangements with non-residents carried out without the use of a resident foreign exchange bank.

 
28. Following the announcement of the offer, are there any restrictions or disclosure requirements imposed on persons (whether or not parties to the bid or their associates) who deal in securities of the parties to the bid?

The shareholder disclosure requirements set out in Question 8 apply to the bidder and other parties alike so long as the target company remains listed. It is possible to continue to acquire shares in the target in parallel with an offer, subject to the normal rules on insider dealing and disclosure.

 

Reform

29. Are there any proposals for the reform of takeover regulation in your jurisdiction?

There are no current proposals for reform of the takeover regulations in Norway. However, the following recent initiatives will have an impact on the sector.

Proposed amendments to the substantive test

On 11 March 2015, the Ministry of Trade and Fishery circulated a consultation paper to propose further amendments to the Norwegian merger control regime. Among other things, the Ministry now proposes to abolish the former Norwegian substantive test, which has been based on a "substantial lessening of competition" test and instead align the Norwegian substantive test with the "substantial impediment to efficient competition" test, as applicable under the EU rules. If the proposal is finally adopted, it will also mean that Norway will have to apply the same "consumer welfare standard" as applied by the Commission, instead of the "total welfare standard" currently applied under the Norwegian merger control regime. However, at the time of writing, the outcome of the consultation paper has not been concluded.

The Act on Alternative Investment Fund Managers

On 20 June 2014, the Norwegian Parliament adopted new legislation implementing the EU Directive 2011/61/EU on alternative investment fund managers (AIFM Directive) into Norwegian law. The Act on Alternative Investment Fund Managers entered into force on 1 July 2014.

The AIFM Directive seeks to harmonise the regulation of the various forms of investment management, including venture funds, hedge funds and private equity funds. The new legislation will apply to alternative investment funds (AIFs) irrespective of their legal form and permitted investment universe, subject to the AIF fulfilling certain defined criteria with regard to the size of funds under administration.

Although most of the new Act is not directed at M&A specifically, there are certain rules that are likely to have a sizeable impact on M&A transactions and must be observed relating to take-private transactions if private equity-sponsors/venture funds are involved as potential bidders for a listed target:

  • The first is a rule setting out that the AIF's investment manager must disclose its intentions to the FSA, the target and the target's shareholders regarding the future of the business and repercussions on employment when an AIF acquires control of either a:

    • company whose shares or other securities are admitted to trading on a regulated market;

    • non-listed company (subject to the non-listed company's number of employees, revenues and whether its balance sheet exceeds certain thresholds).

  • The new legislation also imposes limitations on financial sponsors' ability to take part in post-closing asset stripping of listed target companies. In line with this, the Ministry of Finance has now implemented a regulation under the new Act that limits the financial sponsors' ability to facilitate, support or instruct any distribution, capital reduction, share redemption or acquisitions of own shares by a listed target for a period of 24 months following an acquisition of control of such target, if either:

    • any such distributions/transactions means that the target's net assets set out in the target's annual accounts on the closing date of the last financial year are, or following such a distribution would become, lower than the amount of the subscribed capital plus those reserves which may be not distributed under the law or the statutes;

    • any such distributions/transactions exceeds the profit for the previous fiscal year plus any subsequent earnings and amounts allocated to the fund for this purpose, less any losses and other amounts that in accordance with applicable law or statute must be allocated to restricted funds.

The above limitations on distribution do not apply on a reduction in the subscribed capital, the purpose of which is to offset losses incurred or to include sums of money in a non-distributable reserve, provided that, the amount is not more than 10% of the subscribed capital. The above anti-asset stripping provision will also apply to non-listed companies that fall within the thresholds set out in the legislation with regard to number of employees, revenue and so on.

It is likely that the above limitation rule will to some extent limit private equity funds' ability to conduct a debt pushdowns in connection with leveraged buyout transactions, and that this again will make such leverage buyouts more difficult to achieve.

EU initiatives

In recent years, the EU has proposed and/or adopted several new directives, regulations, and/or clarification statements that also Norway in some form, likely must adopt and implement to comply with its obligations under the EEA agreement. Set out below, we have listed some of these EU initiatives that we expect that may come to have a future impact (either directly or indirectly) on the regulatory framework for takeovers in Norway:

  • Directive 2013/50/EU amending the Transparency Directive (directive 2004/109/EC).

  • Regulation (EU) No 596/2014 of 16 April 2014 on market abuse (MAR), replacing the Market Abuse Directive.

  • Directive 2014/65/EU on markets in financial instruments (MiFID II), which replaces the MiFID I.

  • Proposed Market in Financial Instruments Regulation (MiFIR, replacing MiFID I).

  • Rules from the European Securities and Markets Authority (ESMA), including a public statement on shareholder co-operation and acting in concert under the Takeover Bid Directive.

Norway has previously been reasonably quick to implement new legislative initiatives from the EU. However, for the last few years, Norway has lagged behind, particularly within the capital markets area. The reason seems to be the enhanced legislative initiatives by the EU following Lehman Brothers and the Eurozone sovereign debt crisis that resulted in a substantially increased number of rules that have to go through the process of being considered relevant, or not, and need implementation under the EEA agreement.

In addition, the new structure under several of the EU legislative initiatives, where independent EU supervision authorities, such as ESMA, have pan-European reach, either through direct supervision or through the active co-ordination of national supervisory activity, constitutes a constitutional challenge for Norway. These pan-European supervision authorities have been granted certain powers that under Norwegian law cannot be delegated from Parliament.

This constitutional challenge must be resolved before Norway can implement several of these measures. It is therefore uncertain when Parliament is going to be presented proposals from the Government for amending Norwegian legislation to bring it into line with the above EU initiatives. However, it is likely that several amendments to the framework for takeovers will be proposed in the next couple of years.

 

The regulatory authorities

Financial Supervisory Authority of Norway (Finanstilsynet) (FSA)

W www.finanstilsynet.no

Main area of responsibility. The FSA is the governmental supervisory authority for the financial markets.

Norwegian Competition Authority (Konkurransetilsynet) (NCA)

W www.konkurransetilsynet.no

Main area of responsibility. The Norwegian Competition Authority is responsible for the supervision, implementation and enforcement of competition law.

Oslo Stock Exchange (Oslo Børs) (OSE)

W www.oslobors.no

Main area of responsibility. The OSE is the authorised exchange for stocks and other equity instruments.

Register of Business Enterprises (Foretaksregisteret i Brønnøysund)

W www.brreg.no

Main area of responsibility. The Register of Business Enterprises is responsible for company registrations of all Norwegian and foreign enterprises in Norway. It is an important source of information on all legal entities.



Contributor profiles

Ole K Aabø-Evensen, Senior Partner and Co-head of M&A

Aabø-Evensen & Co Advokatfirma

T +47 24 15 90 10/+47 909 95 470
F +47 24 15 90 01
E oka@aaboevensen.com
W www.aaboevensen.com

Professional qualifications. Norway, 1988

Areas of practice. Public and private M&A, including corporate finance, tender offers and take private transactions, mergers, demergers (spin-off), share exchange, asset acquisition, share acquisition, group restructuring, joint ventures, LBO, MBO, MBI, IBO, private equity acquisitions and exits, due diligence, takeover defence, shareholder activism, securities and securities offerings including credit and equity derivatives, acquisition financing, anti-trust and TUPE-issues.

Languages. English, Norwegian and the other Scandinavian languages.

Professional associations/memberships. The Norwegian Bar Association; the International Fiscal Association; International Bar Association; the American Bar Association.

Recent publications

  • Aabø-Evensen: On acquisitions of Companies and Business, Universitetsforlaget, Oslo (2011), 1,500 page Norwegian textbook on M&A.
  • The Mergers & Acquisitions Review – Ninth Edition (2015), Norway chapter.
  • (Getting the Deal Through) Mergers & Acquisitions in 59 Jurisdictions World Wide 2015 edition, Norway chapter.
  • Chambers' Practice Guide: Mergers & Acquisitions (2015), Norway chapter.
  • (Global Legal Insight) International Mergers & Acquisitions – Fourth Edition (2015), Norway chapter.
  • The Mergers & Acquisitions Review – Eight Edition (2014), Norway chapter.
  • International Comparative Legal Guide to: Private Equity – First Edition (2015), Norway chapter.
  • '(Global Legal Insight) International Mergers & Acquisitions – Third Edition (2014), Norway chapter.
  • International Comparative Legal Guide to: Mergers &Acquisitions (2014), Norway chapter.
  • (Euromoney Publication) International Mergers & Acquisitions' Review 2014: Norway – Key aspects of M&A transactions: Recent trends and developments from a legal perspective.
  • Practical Law: Private Acquisitions Multi-jurisdictional Guide – First Edition (2013), Norway chapter.
  • The Mergers & Acquisitions Review – Seventh Edition (2013), Norway chapter.
  • Chambers' Practice Guide: Mergers & Acquisitions (2013), Norway chapter.
  • (Getting the Deal Through) Mergers & Acquisitions in 67 Jurisdictions World Wide 2013 edition, Norway chapter.
  • International Comparative Legal Guide to: Mergers & Acquisitions (2013), Norway chapter.
  • (Euromoney Publication) International Mergers & Acquisitions' Review 2013: Norway – Trends and updates.
  • (Global Legal Insight) International Mergers & Acquisitions – Second Edition (2013), Norway chapter.
  • The Mergers & Acquisitions Review – Sixth Edition (2012), Norway chapter.
  • (Euromoney Publication) International Mergers & Acquisitions' Review 2012: Norway – M&A transactions: a legal perspective.
  • (Global Legal Insight) International Mergers & Acquisitions – First Edition (2011), Norway chapter.
  • (Euromoney Publication) International Mergers & Acquisitions' Review 2011: Norway – M&A transactions: recent legal developments and proposed or expected changes.
  • (Getting the Deal Through) Mergers & Acquisitions; the 2009, 2010, 2011, 2012, 2013 and 2014 editions, Norway chapter.

Recent activities

  • Recognised by international rating agencies such as Chambers, Legal 500 and European Legal Experts.
  • In the last ten years, rated among the top three M&A lawyers in Norway by his peers in the annual surveys conducted by the Norwegian Financial Daily (Finansavisen). In the 2012 and 2013 edition of this survey, named by the Norwegian Financial Daily as Norway's number one M&A lawyer.
  • Former head of M&A and corporate legal services of KPMG Norway, and is now the co-head of Aabø-Evensen & Co's M&A team.

Lars André Gjerdrum, Partner and Head of Equity Capital Markets

Aabø-Evensen & Co Advokatfirma

T +47 24 15 90 90/+47 922 26 121
F +47 24 15 90 01
E lag@aaboevensen.com
W www.aaboevensen.com

Professional qualifications. Norway, 2006

Areas of practice. Lars André Gjerdrum is Aabø-Evensen & Co's Head of Equity Capital Markets. He is highly experienced in the field of ECM transactions, including private placements, rights issues, IPOs and public M&A, and corporate and securities regulations. Lars André possesses a broad competence when it comes to both public and private transactions, including private equity transactions, due diligence assignments and cross-border capital markets transactions. During the last eight years, Lars André has worked on several of the largest public ECM and M&A transactions in the Nordic market having vast experience from Thommessen (Oslo, London) and Latham Watkins (London).

Languages. English, Norwegian and the other Scandinavian languages.

Professional associations/memberships. The Norwegian Bar Association.


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