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ICLG
The International Comparative Legal Guide to:
Mergers & Acquisitions 2018
12th Edition
A practical cross-border insight into mergers and acquisitions
Published by Global Legal Group, with contributions from:
Aabø-Evensen & Co Advokatfirma G. Elias & Co. Schoenherr
Advokatfirman Törngren Magnell Gjika & Associates Attorneys at Law SEUM Law
Alexander & Partner HAVEL & PARTNERS s.r.o. Skadden, Arps, Slate, Meagher
Ashurst Hong Kong Houthoff & Flom LLP
Astrea Indrawan Darsyah Santoso Škubla & Partneri s.r.o.
Atanaskovic Hartnell Maples and Calder Slaughter and May
Bär & Karrer Ltd. Matheson SZA Schilling, Zutt & Anschütz
BBA Mehrteab Leul & Associates Rechtsanwaltsgesellschaft mbH
Bech-Bruun Law Office Ughi e Nunziante Studio Legale
Bonn Steichen & Partners MJM Limited VCI Legal
Corpus Legal Practitioners Motta Fernandes Advogados Villey Girard Grolleaud
Cyril Amarchand Mangaldas Nader, Hayaux & Goebel Vukić and Partners
Debarliev, Dameski & Kelesoska Nishimura & Asahi Wachtell, Lipton, Rosen & Katz
Attorneys at Law Nobles WBW Weremczuk Bobeł
Dittmar & Indrenius Oppenheim Law Firm & Partners
Attorneys at Law
E & G Economides LLC Popovici Niţu Stoica & Asociaţii
WH Partners
ENSafrica Ramón y Cajal Abogados
Zhong Lun Law Firm
Ferraiuoli LLC SBH Law OfficeThe International Comparative Legal Guide to: Mergers & Acquisitions 2018
General Chapters:
1 Private Equity and Public Bids: UK Developments in 2017 – Scott Hopkins & Richard Youle,
Skadden, Arps, Slate, Meagher & Flom (UK) LLP 1
2 Global M&A Trends in 2018 – Lorenzo Corte & Denis Klimentchenko, Skadden, Arps, Slate, Meagher
& Flom (UK) LLP 4
Contributing Editors 3 For Corporate Litigation, Delaware is Still the First State – Adam O. Emmerich & Trevor S. Norwitz,
Scott Hopkins and Lorenzo Wachtell, Lipton, Rosen & Katz 7
Corte, Skadden, Arps, Slate,
Meagher & Flom (UK) LLP Country Question and Answer Chapters:
Sales Director 4 Albania Gjika & Associates Attorneys at Law: Gjergji Gjika & Evis Jani 11
Florjan Osmani
5 Australia Atanaskovic Hartnell: Jon Skene & Lawson Jepps 18
Account Director
6 Austria Schoenherr: Christian Herbst & Sascha Hödl 25
Oliver Smith
7 Belarus SBH Law Office: Alexander Bondar & Elena Selivanova 35
Sales Support Manager
Toni Hayward 8 Belgium Astrea: Steven De Schrijver 42
9 Bermuda MJM Limited: Peter Martin & Brian Holdipp 53
Editor
Nicholas Catlin 10 Brazil Motta Fernandes Advogados: Henrique de Rezende Vergara &
Cecilia Vidigal Monteiro de Barros 59
Senior Editors
Suzie Levy 11 British Virgin Islands Maples and Calder: Richard May & Matthew Gilbert 66
Caroline Collingwood 12 Bulgaria Schoenherr (in cooperation with Advokatsko druzhestvo Stoyanov & Tsekova):
Ilko Stoyanov & Katerina Kaloyanova 72
Chief Operating Officer
Dror Levy 13 Cayman Islands Maples and Calder: Nick Evans & Suzanne Correy 81
Group Consulting Editor 14 China Zhong Lun Law Firm: Lefan Gong 87
Alan Falach 15 Croatia Law firm Vukić and Partners: Zoran Vukić & Ana Pehar 94
Publisher 16 Cyprus E & G Economides LLC: Marinella Kilikitas & George Economides 101
Rory Smith
17 Czech Republic HAVEL & PARTNERS s.r.o.: Václav Audes & Jan Frey 107
Published by 18 Denmark Bech-Bruun: Steen Jensen & David Moalem 114
Global Legal Group Ltd.
59 Tanner Street 19 Ethiopia Mehrteab Leul & Associates Law Office: Mehrteab Leul Kokeb &
London SE1 3PL, UK Getu Shiferaw Deme 120
Tel: +44 20 7367 0720 20 Finland Dittmar & Indrenius: Anders Carlberg & Jan Ollila 126
Fax: +44 20 7407 5255
21 France Villey Girard Grolleaud: Frédéric Grillier & Daniel Villey 133
Email: info@glgroup.co.uk
URL: www.glgroup.co.uk 22 Germany SZA Schilling, Zutt & Anschütz Rechtsanwaltsgesellschaft mbH:
Dr. Marc Löbbe & Dr. Stephan Harbarth, LL.M. (Yale) 139
GLG Cover Design
F&F Studio Design 23 Hong Kong Ashurst Hong Kong: Joshua Cole & Chin Yeoh 146
GLG Cover Image Source 24 Hungary Oppenheim Law Firm: József Bulcsú Fenyvesi 152
iStockphoto 25 Iceland BBA: Baldvin Björn Haraldsson & Stefán Reykjalín 158
Printed by 26 India Cyril Amarchand Mangaldas: Nivedita Rao & Anand Jayachandran 164
Ashford Colour Press Ltd 27 Indonesia Indrawan Darsyah Santoso: Eric Pratama Santoso & Barli Darsyah 172
March 2018
28 Ireland Matheson: Fergus A. Bolster & Brian McCloskey 178
Copyright © 2018
Global Legal Group Ltd. 29 Italy Ughi e Nunziante Studio Legale: Fiorella Alvino & Fabio Liguori 187
All rights reserved 30 Japan Nishimura & Asahi: Tomohiro Takagi & Tomonori Maezawa 193
No photocopying
31 Korea SEUM Law: Steve Kim & Seonho Kim 202
ISBN 978-1-911367-97-0
32 Luxembourg Bonn Steichen & Partners: Pierre-Alexandre Degehet 210
ISSN 1752-3362
33 Macedonia Debarliev, Dameski & Kelesoska Attorneys at Law:
Strategic Partners Emilija Kelesoska Sholjakovska & Ljupco Cvetkovski 216
34 Malta WH Partners: James Scicluna & Rachel Vella Baldacchino 223
35 Mexico Nader, Hayaux & Goebel: Yves Hayaux-du-Tilly Laborde &
Eduardo Villanueva Ortíz 229
36 Montenegro Moravčević Vojnović and Partners in cooperation with Schoenherr:
Slaven Moravčević & Miloš Laković 235
37 Netherlands Houthoff: Alexander J. Kaarls & Willem J.T. Liedenbaum 242
38 Nigeria G. Elias & Co.: Obianuju Ifebunandu & Yemisi Falade 250
Continued Overleaf
Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720
Disclaimer
This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice.
Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication.
This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified
professional when dealing with specific situations.
WWW.ICLG.COMThe International Comparative Legal Guide to: Mergers & Acquisitions 2018
Country Question and Answer Chapters:
39 Norway Aabø-Evensen & Co Advokatfirma: Ole Kristian Aabø-Evensen &
Gard A. Skogstrøm 257
40 Poland WBW Weremczuk Bobeł & Partners Attorneys at Law: Łukasz Bobeł 271
41 Puerto Rico Ferraiuoli LLC: Fernando J. Rovira-Rullán & Yarot T. Lafontaine-Torres 278
42 Romania Popovici Niţu Stoica & Asociaţii: Alexandra Niculae 285
43 Saudi Arabia Alexander & Partner: Dr. Nicolas Bremer 290
44 Serbia Moravčević Vojnović and Partners in cooperation with Schoenherr:
Matija Vojnović & Vojimir Kurtić 297
45 Slovakia Škubla & Partneri s.r.o.: Martin Fábry & Marián Šulík 305
46 Slovenia Schoenherr: Vid Kobe & Marko Prušnik 312
47 South Africa ENSafrica: Professor Michael Katz & Matthew Morrison 323
48 Spain Ramón y Cajal Abogados: Guillermo Muñoz-Alonso & Álvaro Bertrán Farga 332
49 Sweden Advokatfirman Törngren Magnell: Johan Wigh & Viktor Olsson 338
50 Switzerland Bär & Karrer Ltd.: Dr. Mariel Hoch 344
51 Ukraine Nobles: Volodymyr Yakubovskyy & Tatiana Iurkovska 351
52 United Arab Emirates Alexander & Partner: Dr. Nicolas Bremer 359
53 United Kingdom Slaughter and May: William Underhill 367
54 USA Skadden, Arps, Slate, Meagher & Flom LLP: Ann Beth Stebbins &
Thomas H. Kennedy 374
55 Vietnam VCI Legal: Tuan A. Phung & Kent A. Wong 391
56 Zambia Corpus Legal Practitioners: Sharon Sakuwaha 397Chapter 39
Norway Ole Kristian Aabø-Evensen
Aabø-Evensen & Co Advokatfirma Gard A. Skogstrøm
tender offers involving listed securities. The rules are supplemented
1 Relevant Authorities and Legislation
by rules, regulations, guidelines and recommendations issued by
the OSE. Mergers and acquisitions of private and unlisted public
1.1 What regulates M&A? companies, however, are not subject to such or similar regulations.
Those familiar with M&A transactions and methodology in most
The main statutory framework regulating M&A transactions in other parts of Europe will find the Norwegian landscape quite
Norway consists of the Private Limited Liability Companies Act familiar, particularly with respect to public takeovers.
(“LLCA”), the Public Limited Liability Companies Act (“PLLCA”),
and the Partnership Act. Furthermore, tender offers and other 1.3 Are there special rules for foreign buyers?
transactions involving public companies whose securities are listed
on a regulated marketplace in Norway (i.e. the Oslo Stock Exchange, There are no general requirements or restrictions aimed at foreign
including the Oslo Axess list; collectively, “OSE”) are subject to the buyers. In certain sectors governing vital national interests,
Securities Trading Act (“STA”) and the Securities Trading Regulation however, such as the power and energy sector (including oil, gas and
(“STR”). The foregoing corporate-specific framework is on a case- hydropower) and the finance sector (including financial, credit and
by-case basis supplemented by various and more general regulations insurance institutions), there are certain limitations on ownership
found, inter alia, in the Contracts Act and the Sale of Goods Act (both and business operations. In addition, under the PLLCA, the CEO
applicable to most contracts), the Accounting Act and the Income Tax and at least half of the directors/board members in a limited liability
Act (pertaining to transactional tax considerations), the Competition company must either be residents of Norway, or EEA nationals who
Act (which also covers antitrust), and the Employment Act. reside in an EEA State. It is worth noting that at least half of the
As Norway is a member of the European Free Trade Association ordinary directors must fulfil the residential requirement – it will not
(“EFTA”) and the European Economic Area (“EEA”), most suffice that solely deputy directors fulfil it, irrespective of how many
EU regulations pertaining to M&A transactions have also been of them are Norwegian residents or EEA nationals. The Ministry
implemented in Norwegian law, thus subjecting cross-border of Trade and Industry may grant exemptions from the residency
transactions within the EU (involving publicly listed companies) requirements on a case-by-case basis.
to strict antitrust regulations promulgated and enforced by the
European Commission (“EC”) and the EFTA Surveillance Authority
1.4 Are there any special sector-related rules?
(“ESA”). With respect to the foregoing, the Competition Act has
corresponding merger control provisions, which authorise the
In certain industries, there are sector-specific requirements that must
Norwegian Competition Authority (“NCA”) to intervene against anti-
be considered, e.g. requirements for public permits, concessions and
competitive concentrations; therefore, from a practical perspective,
approvals. As mentioned in question 1.3 above, these industries
the “one-stop shop” principle formulated in Council Regulation No.
typically pertain to the safeguarding of vital national interests, such
139/2004 effectively averts unnecessary cross-review by the EC, the
as banking, insurance, petroleum, hydropower, telecommunications,
ESA and the NCA.
media, fisheries, and agriculture. An example of sector-specific
Other relevant EU regulations implemented in Norwegian law include regulations can also be found in the Norwegian Financial Institution
the Prospectus Directive, the Takeover Directive, the Transparency Act. The act regulates the acquisitions of banks, insurance
Directive, the Market Abuse Directive, and the Markets in Financial companies and other financial institutions, and continues the former
Instruments Directive (“MiFID”). approval regime for acquisition of shareholdings in a Norwegian
financial institution exceeding 10%. Such acquisitions must be
1.2 Are there different rules for different types of notified to the Norwegian Financial Supervisory Authority (the
company? “Norwegian FSA”) and require approval from the Ministry of
Finance. Approval is also required if the ownership exceeds 20%,
The STA and STR, applicable to companies listed on a Norwegian 30% and 50%. Such approval may be withheld if the new owner
regulated market, establish a regime to prevent market abuse is not deemed sufficiently qualified to be the owner of such an
and insider trading by regulating prospectus and information institution.
requirements, and by providing detailed regulations with respect to
ICLG TO: MERGERS & ACQUISITIONS 2018 WWW.ICLG.COM 257Aabø-Evensen & Co Advokatfirma Norway
1.5 What are the principal sources of liability? 2 Mechanics of Acquisition
1.5.1 Market manipulation 2.1 What alternative means of acquisition are there?
Market manipulation can take place through: (i) the purchasing or
selling of financial instruments that gives or is likely to produce The three most common methods to acquire all shares in a
false, incorrect or misleading market signals as to the supply of, Norwegian listed company are stakebuilding with an ensuing
Norway
demand for, or pricing of financial instruments, or which secures the voluntary or mandatory tender offer; voluntary or mandatory tender
price of one or several such instruments at an unusual or artificial offer (with or without a preceding stakebuilding); and statutory
level; (ii) transactions entered into, or trade-orders given, as a result mergers. It is also, of course, possible to structure a takeover as an
of any form of misleading conduct; or (iii) the dissemination of asset transaction by which the purchaser acquires the business assets
information through the media (including the Internet) or any other of the target instead of the shares in the target.
means, which gives or is likely to give false, incorrect or misleading
2.1.1 Stakebuilding
signals regarding financial instruments, including the dissemination
of rumours and news, when the person making the dissemination Stakebuilding is the process of gradually purchasing shares in
either knew, or should have known, that the information was false, a publicly traded company in order to gain leverage and thereby
incorrect or misleading. Anyone who wilfully or negligently increase the chances of a successful subsequent bid for the entire
commits market manipulation may be penalised by a fine or by company (i.e. the remaining outstanding shares). It is possible
imprisonment of up to six years. Such violations may also be (and fairly common) in a stakebuilding process to seek irrevocable
considered as fraud, which is a felony offence under the Norwegian undertakings (pre-acceptances) from key shareholders prior
criminal code. to announcing a subsequent voluntary bid (see below). Such
irrevocable undertakings are often collected in preparations for
1.5.2 Abuse of inside information
voluntary offers. The irrevocable undertakings are typically drafted
Trading in financial instruments on the basis of inside information as either “soft” or “hard” irrevocables (“Irrevocables”) – the
(precise information likely to have a significant effect on the price, former normally only commits the selling shareholder to accept
that is not publicly available or commonly known in the market) is the offer if no higher competing bid is made, whereas the latter
unlawful. This applies regardless of whether it is carried out wilfully commits the selling shareholder to accept the offer regardless of
(with intent) or through negligence (by failing to adhere to the duty whether a subsequent higher competing bid is put forward. There
of care required). This trading prohibition applies to any person, is no limitation on the time period during which a stake can be built
including but not limited to bidders. The prohibition applies only and, save for strict regulations regarding insider trading, disclosure
to trades that can be characterised as abuse of inside information. requirements and mandatory bid rules, Norwegian law has fairly
Whether or not the trade constitutes abuse must be assessed in each limited provisions governing the process. The aforementioned
individual case. Under the STA, the prohibition does not prevent notwithstanding, it is imperative that the referenced regulations
the normal exercise of an option or forward/futures contract upon are observed at all times as they can constitute a crucial factor for
expiry of the contract. A breach of the insider information trading whether the process succeeds or not. On notification requirements
prohibition may be sanctioned by fines or prison for up to six years. and disclosure triggers in the stakebuilding process, please see
Pursuant to the preamble (30) of the Market Abuse Regulation, directly below, in addition to question 5.2 et seq.
access to and use of inside information will not in itself be considered
2.1.2.1 Voluntary offer (with or without a preceding stakebuilding)
a violation of the insider trading rules in a situation where the bidder
has issued a public takeover bid for the purpose of gaining control The most common approach when acquiring a company listed on
of the target or proposing a merger with the target. Hence, access a Norwegian regulated market is through a voluntary tender offer
to and use of inside information acquired by a bidder during a due with a subsequent squeeze-out of minority shareholders. There
diligence process with respect to the target and the public bid in such are no statutory limitations as to what conditions a voluntary offer
situations would not, in itself, necessarily constitute abuse of inside may contain, which affords the bidder a great deal of flexibility
information. A bidder receiving inside information, however, has a with regards to terms and conditions – such as price, type of
duty not to disclose such information to unauthorised third parties. consideration (cash, in-kind, share-swap, or a combination) and
A listed target company granting a bidder access to due diligence conditions precedent such as satisfactory due diligence, no material
documentation may thus be obligated to disclose inside information adverse change, governmental approvals, and minimum acceptance
not yet known in the marketplace. requirements (typically acceptance from 90% or two-thirds of the
shares and votes). The offer can be subject to financing, but the
1.5.3 Other sources of liability
offer document must include information on how the acquisition is
Violation of the STA and the STR in connection with tender offers to be financed. Whether to include the whole gamut of conceivable
for listed companies, including, in particular, misrepresentation or conditions, or only to include limited conditions in order to complete
omission of certain information in the offer document, may lead to the transaction quickly and avoid competing bids, is entirely at the
financial penalties. In the case of non-compliance with the STA and bidder’s discretion. The bidder may also, if so desired, direct the
the STR, the OSE or the Norwegian FSA may impose sanctions, offer only to a selected group of shareholders. As mentioned above,
including administrative fines and orders, civil liability and criminal there are no statutory provisions regarding minimum consideration
charges. Non-conformity with guidelines and recommendations in a voluntary offer. Nonetheless, and in order to make the offer
issued by the OSE, and actions that do not comply with good market attractive, it is common to add a 20% to 40% premium on the current
practice, may also be criticised by the OSE and lead to attention share trading price. In previous years, there have been considerable
from the media that can result in considerable (and costly) bad will. variations in the level of premiums offered in voluntary offers,
Liability under tort law is also possible, both for the bidder, target with some examples reaching premiums of 60% above the average
and target’s board, but this is rarely seen in Norwegian public M&A. trading price of the preceding 30 days.
258 WWW.ICLG.COM ICLG TO: MERGERS & ACQUISITIONS 2018Aabø-Evensen & Co Advokatfirma Norway
If a voluntary offer entails that the mandatory bid obligation is less favourable than the alternative consideration offered. The
triggered (i.e. more than one third of the voting rights) if the bid consideration offered must be unconditionally guaranteed by either
is accepted by those able to make use of it, a voluntary offer in a bank or an insurance undertaking authorised to conduct business
accordance with the rules on voluntary offers shall be made. In in Norway. If the bidder acquires 90% or more of the shares and
this case certain requirements related to mandatory offers (e.g. offer voting rights in the target company, the bidder can unilaterally
document, equal treatment of shareholders) will likewise apply for acquire the remaining shares by squeeze-out.
the voluntary offer. If a voluntary offer leads to the exceeding of the 2.1.3 Statutory merger
Norway
mandatory offer threshold, the bidder will also be required to make a
Norwegian limited liability companies may, subject to approval by
subsequent mandatory offer (unless the voluntary offer was made in
two-thirds of the shares and votes represented at the general meeting
accordance with the rules on mandatory bids). The voluntary offer
(unless the articles of association require a higher majority), resolve
document must be pre-approved by the OSE, but the bidder is still
to carry out a statutory merger in which the surviving company
free to set the terms and conditions. The offer period for a voluntary
acquires all assets, rights and obligations of one or more surrendering
tender offer must be at least two weeks but no more than 10 weeks,
companies. The shareholders of the surrendering company can be
with a two-week period frequently used as the initial offer period.
compensated with shares in the surviving company, or alternatively
The bidder may avoid the situation where mandatory offer by a combination of shares and cash (provided that the cash
requirements are imposed by reserving the right to withdraw or portion does not exceed 20% of the aggregate compensation). If
reduce the offer if it is accepted by shareholders holding more than the surviving company is part of a group that in aggregate holds
one-third of the voting rights. If an offer is limited to only a very more than 90% of its shares and voting powers, compensation to the
few named shareholders, and such specified offers are not made shareholders of the surrendering company may consist of shares in
simultaneously or in connection with each other, neither a voluntary the surviving company’s parent or another group company in which
nor mandatory offer may be triggered, depending on the specific the group in aggregate holds more than 90% of the shares and voting
circumstances. powers. It is also possible to carry out a merger by combining two or
2.1.2.2 Mandatory offer (with or without a preceding stakebuilding) more companies into a new company established in connection with
A bidder which directly, indirectly or through consolidation of the merger (statutory consolidation). In such cases, all surrendering
ownership (following one or more voluntary offers) has acquired companies are dissolved upon completion of the merger.
more than one-third of the votes in a Norwegian target company Norwegian law statutory mergers are not considered a transfer or
listed on a Norwegian regulated market (or in a foreign company assignment of the merging companies’ rights and obligations, but
listed in Norway but not in its home country), must make a rather a continuation of their business. This transaction model may
mandatory offer for the remaining outstanding shares. Certain therefore be favourable from a corporate tax perspective as it does
exceptions do apply, the most practical being when shares are not constitute realisation of capital gains.
acquired as consideration in mergers and demergers. After passing To carry out a statutory merger, the board of directors in both the
the initial one-third threshold, the bidder’s obligation to make a surviving and the surrendering company must first negotiate, draft
mandatory offer for the remaining shares is repeated when he passes and sign a joint merger plan that describes the terms and conditions
(first) 40% and (then) 50% of the voting rights (consolidation rules of the merger, and then each board must prepare a written report
apply). Certain derivative arrangements (e.g. total return swaps) that explains the reasoning behind the merger and how it may affect
may be considered as controlling votes in relation to the mandatory the company’s employees, etc. Finally, each board must draft a
offer rules. statement to be approved by a certified auditor, detailing the valuation
When entering into a transaction that triggers a mandatory offer, the procedure applied when calculating the consideration payable
purchaser must immediately notify both the company and the OSE to the shareholders of the surrendering company. The foregoing
about the acquisition and inform whether it intends to resell all or documentation shall, together with the merging companies’ most
parts of the shares or if it intends to make an offer for the remaining recent annual accounts and other pertinent financial information,
shares. The purchaser can avoid the mandatory offer obligation be sent to the shareholders in each company and registered with
by selling the shares exceeding the relevant threshold within four the Norwegian Register for Business Enterprises (“RBE”) no later
weeks. If the purchaser does not intend to sell shares, he must prepare than one month before the merger is presented for approval by the
a mandatory offer document and cannot, at a later stage, retract general meeting in each company. Please note that if a Norwegian
or amend his intentions to be a sale of shares instead. Before the public limited liability company is involved in a merger, there are
mandatory offer document can be issued, it must be approved by more detailed requirements to the content of the above-mentioned
the OSE. This normally takes one to two weeks. Once the offer reports regarding potential effects for employees, etc. When the
document is issued, the bidder shall afford the shareholders a period merger is approved by the general meetings, it must be reported to
of four to six weeks to accept or decline. The share price offered the RBE within one month; otherwise, the resolutions will lapse and
cannot be lower than the highest price paid or agreed to be paid by the be deemed void.
bidder for shares (or rights to shares) in the company during the last Pursuant to EU Directive 2005/56/EC, the aforementioned
six months. Notwithstanding the foregoing, the STA provides that the principles and regulations governing statutory mergers are also
takeover supervisory authority (i.e. the exchange where the securities available for Norwegian companies merging cross-border within
are listed) may demand that market price is paid for the shares insofar the EU and EEA, and cross-border mergers/demergers between
as it is clear that the market price at the time the mandatory offer Norwegian companies and companies domiciled within the EU or
obligation was triggered exceeds the price offered. However, as EEA can also be carried out on a tax-free basis subject to certain
the STA provision does not provide sufficient guidance on how this conditions. A fundamental condition is that the assets, rights
market price is to be calculated, an EFTA-court ruling from 2010 and responsibilities of the Norwegian company (pre-merger or
found the rule to be non-compliant with the EU takeover rules. demerger) remain in a Norwegian branch of the foreign company
A mandatory offer must be unconditional, and must be for all shares (post-merger or demerger). Public tender offers and other offer
in the company. The consideration may be offered in cash or by structures are nonetheless generally preferred to statutory mergers,
alternative means (such as shares in the bidder), provided, however, since the latter only allows for 20% of the consideration to be in
that shareholders can always require cash settlement at terms no cash, requires more formalities and documentation, and normally
ICLG TO: MERGERS & ACQUISITIONS 2018 WWW.ICLG.COM 259Aabø-Evensen & Co Advokatfirma Norway
takes longer to complete. Still, a statutory merger may be suitable mandatory offer that enables an immediate and subsequent squeeze-
where there is not enough cash available to carry out a mandatory out of the minority shareholders, the bidder should most likely
offer with a subsequent squeeze-out of the minority shareholders. anticipate that it takes around five months from the start to the target
Statutory mergers are generally not covered by the rules of public being finally delisted. In cases where the bidder decides to stop the
takeovers in the STA. Transactions that do not meet the formal takeover process after such a mandatory offer because he is unable
requirements for a statutory merger but are quite similar in form to start a squeeze-out immediately thereafter, he will still have spent
(such as stock-for-stock exchanges) may nonetheless be subject to at least three months in total.
Norway
the STA’s takeover rules if the target company is listed on the OSE. In statutory mergers where only private limited liability companies
are involved, the merger plan with supporting documents (see
2.2 What advisers do the parties need? question 2.1 above) shall be made available for the shareholders
no later than two weeks prior to the general meeting in which the
merger will be decided upon. If public limited liability companies
Both the bidder and target need qualified legal advisers in order to
are involved, the notice period is one month prior to the general
comply with the applicable legal framework and for the preparation
meeting, and the merger plan must also be filed with the RBE a month
of all legal documentation required in the transaction. Depending on
before the meeting. If approved by the general meeting, the merger
the transactional complexity and status of the target company (large,
must thereafter be filed with the RBE for public announcement –
mid or small cap), a bidder will almost always also engage financial
this applies to private and public limited companies alike. Once
advisers to give input on appropriate valuation/consideration and
published by the RBE, a six-week creditor notice period begins,
how to structure the takeover. Accountants may also be engaged to
upon expiry of which the merger can be effectuated.
analyse the expected post-transaction equity structure based on an
outside-in analysis of the target company, or to conduct a financial
due diligence, provided that the target grants the bidder such access. 2.4 What are the main hurdles?
Although not a requirement (save in certain circumstances), the
target’s board will normally also seek to obtain a fairness opinion The main challenge in any acquisition in a company with several
from a financial adviser, supporting the opinion that the board is shareholders, albeit more relevant to acquisitions of listed rather than
required to make on the offer. privately held companies, is to acquire the 90% of shares and voting
In terms of the settlement under an offer for a publicly listed rights necessary to carry out a subsequent unilateral squeeze-out
company, the bidder will need to engage a bank or a stockbroker of any remaining minority shareholders. Furthermore, it is crucial
to obtain competition clearance (and, if relevant, other regulatory
firm to handle acceptances, clearance and payment in connection
clearance) as soon as possible, given the fact that shareholders may be
with a tender offer process, herewith settlement, in a subsequent
reluctant to accept a voluntary offer that is still subject to regulatory
compulsory acquisition/squeeze-out.
clearance. Prior to issuing a tender offer for a company listed on
Other experts that may be required will naturally depend on the a regulated market, the main hurdles are: obtaining due diligence
type, size, structure, and complexity of the transaction contemplated. access; negotiating financing terms with banks; establishing a good
Sector-specific specialists (e.g. management, environmental, and other dialogue and negotiating the offer terms with target’s board; and
consultants or IT analysts) are brought aboard on a case-by-case basis. (often) securing the support of larger shareholders. Getting the
necessary finance arrangement in place may, in particular, represent
2.3 How long does it take? a major hurdle for a bid dependent on significant leverage. For
mergers, the “main hurdle” is to achieve the necessary approval
by the general meeting in each of the participating companies (i.e.
In general, M&A transactions do not require consent from
two-thirds of the shares and votes represented, unless the articles of
Norwegian authorities, meaning that regular share purchases can be
association contain stricter voting requirements).
completed in accordance with the timeframe agreed upon by the
parties. Standard waiting periods pursuant to relevant competition
law will, of course, apply. If a target company has employees, there 2.5 How much flexibility is there over deal terms and
is a general obligation to inform the employees of the transfer and price?
its potential effects as soon as possible, and relevant collective
employee agreements must always be considered. In a voluntary offer to acquire a listed company, the bidder enjoys
a great deal of flexibility with regards to terms and conditions
In voluntary tender offers, the offer period must be no less than
(see subsection 2.1.2 above). Notwithstanding the absence of any
two weeks and no more than 10 weeks, and for a (subsequent)
statutory provisions to the contrary, an offer is not likely to succeed,
mandatory offer, the period must be at least four weeks and no
however, it contains a premium on the share trading price (market
more than six weeks (see question 2.1 above). Having said this,
price). Although there are examples of substantially higher offers,
how long it will actually take, from the date on which a potential
such premiums commonly range from 20% to 40% on the last 30
bidder starts preparing a takeover of a Norwegian listed target until
days’ average trading price. In a mandatory offer to acquire a listed
such a target is delisted, may vary significantly on a case-by-case
company, the bidder has less flexibility. Besides the obligation to
basis. In general, if a bidder starts out with a voluntary offer and prepare a mandatory offer document to be approved by the OSE, the
receives acceptance of enough shares and voting rights in the target main statutory provisions restricting a bidder’s freedom of contract
to immediately effectuate a subsequent squeeze-out of minority are the requirements of equal treatment of the target’s shareholders,
shareholders, the process will take (at least) four months. In cases and the provision that the offer price cannot be lower than what
where the offer puts the bidder in control of more than one-third, but the bidder paid (or agreed to pay) for shares (or right to shares) in
not enough, of the shares and voting rights to effectuate a subsequent the target during the last six months. Please note that market price
squeeze-out, the bidder will have to plan for an additional two to for the shares may be required if, when the obligation to make a
three months, because he must then issue a mandatory offer. Under mandatory offer was triggered, the price was higher than the now
such circumstances, the total timeframe from the start of the process offered price. As set out in subsection 2.1.2.2, the OSE may decide
until the bidder is able to delist the target will normally take at least that the offer price must be the market price of the shares if it finds
six months. However, in the event that the bidder starts out with a that the market price at the offer date is higher than the bid price.
260 WWW.ICLG.COM ICLG TO: MERGERS & ACQUISITIONS 2018Aabø-Evensen & Co Advokatfirma Norway
In a statutory merger, the flexibility in defining the terms and
conditions is also restricted due to the fact that (i) the calculation of 2.8 Are there obligations to purchase other classes of
consideration payable to shareholders in the surrendering company, target securities?
as well as other net asset valuations regarding the companies
involved, must be approved by a certified and independent auditor, A mandatory offer must encompass all outstanding shares in the
and (ii) a shareholder with more than one-third of the shares and target, regardless of what voting rights attach to each individual
votes in either of the merging companies may block the merger at share (i.e. full, limited or none). There are no provisions that require
Norway
the general meeting if he so chooses. bidders to purchase the target’s non-equity securities. In relation
to new share issues not yet resolved, the OSE has previously ruled
that the mandatory offer obligation is limited to shares (or rights
2.6 What differences are there between offering cash and
to shares) that exist when the mandatory offer obligation arises or
other consideration?
when the offer is made. To what extent a mandatory offer must
also encompass “new” shares issued during the mandatory offer
The principal difference between offering cash and other period (due to previously issued warrants, convertible bonds
consideration is the amount of information required to be published or other securities being redeemed) is somewhat unclear under
and the process for finalising the documentation. If the offer Norwegian law. In a decision from 2011 concerning Teekay
is settled in cash, it will be sufficient for the bidder to prepare a Corporation’s investment in Sevan Marine ASA, the OSE assumed
more or less standardised offer document (see subsection 2.1.2.1 that the mandatory offer obligation did not include shares issued
et seq.). If transferable securities (typically shares) are offered as in a stakeholder issue in connection with a restructuring of the
consideration, the bidder must also include in the offer document (or issuing company. In its decision, the OSE did not stipulate to
in a supporting document attached thereto) information equivalent what extent such a mandatory offer obligation also encompasses
to that of a prospectus – i.e. such qualified information including, new shares issued during the offer period due to redemption of
inter alia, any special circumstances that can be attributed to the such aforementioned and previously established rights. Until this
bidder or the nature of the securities being offered that is necessary question is clarified and/or resolved by the Norwegian FAS and the
for an investor to make a properly informed assessment of (a) the OSE (i.e. until statutory legislation to the contrary is formulated), it
issuer’s and any guarantor’s financial position and prospects, and is assumed both under legal theory and general market practice that
(b) the rights attaching to the securities in question. This prospectus shares issued during the offer period due to redemption of warrants,
or offer document must be reviewed by the Norwegian FSA etc. will and must be included in the offer.
(in addition to the OSE). The structure of share-for-share offers
is therefore typically more complex, and due to the fact that the
securities offered as consideration first will be admitted to trading 2.9 Are there any limits on agreeing terms with
(thereby fulfilling the criteria of liquidity) upon closing the offer, the employees?
admission process for the offered securities must be aligned so as to
ensure that these securities are liquid at the point of closing the offer. The principle that all shareholders must be treated equally (see
Such an exchange offer may also require registration statements and question 2.5) imposes some constraints on the terms that can be
other filings in foreign jurisdictions. agreed with employees that hold or have options to acquire shares in
the target. At the outset, a bidder may, without limitations, approach
an employee of the target and agree upon whatever terms are desired,
2.7 Do the same terms have to be offered to all
provided that such terms are not contrary to good business practice
shareholders?
and conduct, or in violation of rules and regulations limiting the
consideration a member of a company may accept in connection
During a stakebuilding or in a voluntary offer (that on a fully with its position in the company. As there are no statutory legal
accepted basis does not have the potential of acquiring more than constraints on what can be agreed regarding severance terms for
one-third of the voting rights in the company), the bidder may, in directors or senior executives in a target company, entitlements
general, offer whatever terms he likes to whomever he chooses. provided under such arrangements are likely to be permitted and
However, if a voluntary offer upon full acceptance will give upheld insofar as the arrangements do not give such employees
the bidder control over so many shares and voting rights that an unreasonable benefits at the expense of other shareholders in the
obligation to issue a subsequent mandatory offer is triggered, or company. The foregoing is naturally assuming that no limitations
the mandatory bid obligation is triggered, then equal treatment will follow from the board’s declaration on the fixing of salaries or other
also apply for the voluntary offer and the bidder must afford all remuneration schemes approved by the target’s general meeting.
shareholders equal treatment when making a bid. Note for completeness that Norwegian law restricts employees’
In a mandatory offer situation, all shareholders are, in principle, and directors’ right to accept remuneration from anyone outside the
entitled to equal treatment, meaning that the bidder must present an target company in connection with their performance of assignments
unconditional offer with the same terms and conditions to everyone. on behalf of the target company.
The foregoing notwithstanding, there are certain exceptions to the Also note that a bidder must disclose in the offer document what
principle of equal treatment (e.g. where certain benefits are conferred contact it has had with management or governing bodies of the
upon management shareholders through special agreements in target before the offer was made, herewith including any special
connection with the acquisition). The requirement of equal treatment benefits offered to or agreed with any such individuals. When
does not, however, mean that all shareholders must receive exactly dealing with employees who are also shareholders in the target,
the same offer in all instances. The exact assessment of how the a bidder should furthermore be aware that agreement upon terms
bidder may be allowed to differentiate between shareholders must and benefits which are not exclusively related to the employment of
be decided on a case-by-case basis and will require tailored advice such a shareholder may, in accordance with the principle of equal
suited to the specific situation. treatment, be considered as part of the offered share price, thus
exposing the bidder to the risk of having the offer price in the offer
document adjusted to such a higher amount.
ICLG TO: MERGERS & ACQUISITIONS 2018 WWW.ICLG.COM 261Aabø-Evensen & Co Advokatfirma Norway
Upon completion of a successful acquisition, employees of the target
are, going forward, protected against wrongful termination and 2.11 What documentation is needed?
mass layoffs under existing collective bargaining agreements and
the Employment Act, which has implemented the Acquired Rights The key documents necessarily involved in a public takeover bid
Directive (EC Directive 2001/23/EC). Following acquisition of are: (i) notification of the bidder’s decision to make an offer; (ii)
either the whole or an independent part of a company, employment publication of this notification by the OSE; (iii) an offer document
contracts are, pursuant to the Employment Act, transferred to the (or a prospectus or equivalent document if applicable – see question
Norway
new owner, who will assume all rights and obligations as agreed 2.6) containing information about the bidder, type and terms
between the acquired company and the transferred employees. In of the offer and acceptance mechanics, etc.; (iv) an acceptance
relation to this, the buyer is naturally not allowed to change the form; (v) the target board’s response statement; and (vi) the
terms of employment contracts in order to provoke resignations bidder’s announcement of the result of the offer. Other relevant
from his new employees. Nonetheless, although the Employment documents include: a confidentiality agreement between the parties;
Act protects against both direct and indirect wrongful termination a transaction/due diligence agreement between the bidder and
due to an acquisition (i.e. transfer of ownership), terminations due target; a fairness opinion; documentation relating to the financing;
to rationalisation may still take place, provided that the applicable soft or hard Irrevocables (pre-acceptance undertakings) from the
laws are observed. shareholders; an information brochure to make the offer document/
prospectus more readily accessible; and documentation relating to a
general meeting of shareholders. Additional press announcements
2.10 What role do employees, pension trustees and other and supplements to the offer document/prospectus may be required,
stakeholders play? if the bidder, for instance, wants to increase the offer consideration.
For statutory mergers, the main documentation required consists
Upon receiving an offer document in a public tender process, a
of: a joint merger plan; written reports prepared by the board
target’s board of directors must prepare a public statement wherein
in each company regarding the merger; and an independent
the board’s reasoned evaluation of the offer is presented, including expert statement detailing the valuation procedure applied when
the effects the board anticipates that the bidder’s strategic plans calculating the consideration payable to the shareholders in the
(as detailed in the offer document) will have for the company, surrendering company. The foregoing must, together with other
its location of business and its employees. Normally, employers pertinent information, be sent to the shareholders in each company
in Norway do not engage pension trustees, but rather make use and registered with the RBE at least one month before the merger
of standardised contribution pension schemes offered by larger is presented for approval by the general meeting in each company.
saving banks and insurance companies. The accounts into which Once approved, the merger must be registered with the RBE, at which
the employers’ contribute the monthly pension sum are linked time a creditor notice period of six weeks will begin. Upon expiry of
directly to each individual employee, meaning that if the employee the said notice period, the merger must be registered as completed in
resigns, he or she may either transfer the balance to another pension the RBE, and the surrendering company is automatically dissolved.
scheme or continue the monthly contribution on his own. The Statutory mergers involving one or more publicly listed companies
board’s statement must be sent to the OSE and made available for must also, in general, be notified to the OSE, and the merger plan
the shareholders and employees no later than one week before the (or a supporting document attached thereto) must include such
offer expires. The target’s employees are entitled to prepare their information equivalent to that of a prospectus – see question 2.6 for
own statement with regards to the offer’s effect on employment more detail on such required information.
in the target, which, if given to the board within reasonable time
from when the offer was submitted, shall be attached to the board’s
2.12 Are there any special disclosure requirements?
statement.
In a statutory merger, the board of all companies involved must also
The STA sets out the requirements for disclosure to be made in
prepare a particular statement wherein the merger and its anticipated
an offer document for a listed target, which, inter alia, include a
effects for employees are described. Employee representatives also
requirement to disclose: (i) information about shares in the target
have a statutory right to receive all relevant information and discuss
controlled by the bidder’s related parties; (ii) the method used
the merger with the board. in establishing the bid price; (iii) the principles underlying the
Where the bidder is a Norwegian entity that is bound by a collective valuation of assets offered as consideration; (iv) how the purchase of
bargaining agreement with trade union(s), the bidder may also be the shares is to be financed; (v) special advantages that are afforded
required to consult with the relevant union(s) before making an offer, (by agreement) to members of management or governing bodies
where the intended acquisition would entail “a legal reorganisation” of target; (vi) what contact the bidder has had with management
to the bidder’s existing business. Furthermore, employees and their or governing bodies of target before the bid was made; and (vii)
representative bodies may attempt to influence the outcome of an the purpose of the acquisition and plans for further operation of
offer by publicly expressing their support and/or rejection of the offer. target, etc. Financial information in summary form is also typically
Such statements will typically receive attention from the tabloid included. If securities are offered as consideration, a prospectus
media and the general public, but are rarely able to disrupt or frustrate (or equivalent document) with extensive disclosures is required. A
an offer process otherwise supported by the bidder and the target. bidder that reaches the mandatory offer threshold will also have to
Other stakeholders with interests in a company involved in an M&A disclose this, as well as when the mandatory offer will be made.
process will normally only have such rights or obligations as follow In addition to what is set out above (and what follows in question
from whatever arrangement he or she has with the company. More 5.3 below regarding disclosure requirements in relation to
important contractual relationships, like bank financing/facilities significant shareholdings), merger talks or acquisition discussions
agreements or real estate contracts/leases, often contain “change involving a publicly traded company will at some point constitute
of control” clauses which the parties must consider in light of the inside information between the parties (i.e. information that is likely
transaction. Transactional parties should therefore obtain required to affect the price of a specific financial instrument and that is not
prior consents from such parties. publicly known), and must accordingly be disclosed to the market
by the prospective target – see question 4.2 below.
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2.13 What are the key costs? 2.16 When does cash consideration need to be committed
and available?
The key transactional costs are typically related to advisers (legal,
financial, etc.). Although no stamp duties or similar governmental In a mandatory offer process, settlement in full must be
fees are levied upon share transfers, one should make allowance for unconditionally guaranteed by a financial institution (authorised to
certain minor costs to the OSE and the Norwegian FSA for document issue such guarantees in Norway) before the offer is put forward,
Norway
control, as well as other miscellaneous costs in connection with and the offer document must explain the guarantee mechanisms
preparation and distribution of offer documentation. that are put in place to cover the bidder’s obligations under the
transaction. Once the acquisition is completed, settlement shall
take place as soon as possible but no later than 14 days after the
2.14 What consents are needed?
offer period ends. In a voluntary offer process, the offer document
must include information on how the acquisition is to be financed,
In acquisitions of publicly listed companies, the OSE (and the but there is no requirement that the offer is financed or guaranteed,
Norwegian FSA, in cases where a prospectus is required) must and the settlement procedure may, to some extent, be decided by the
approve the offer and the offer document before it can be launched, bidder. In practice, however, the required settlement mechanisms
and in mergers, the merger plan must be approved by the general for a mandatory offer will normally also be adhered to by bidders
meeting in all participating companies. In both instances (including in voluntary offers.
acquisitions of privately held companies), it will be necessary to
file and obtain approval from the NCA if combined group turnover
of the acquirer and the target in Norway is NOK 1 billion or more, 3 Friendly or Hostile
and at least two of the undertakings concerned each have an annual
turnover in Norway exceeding NOK 100 million. A merger filing
3.1 Is there a choice?
may be required under the NCA (or alternatively under the EU
Merger Control) if both parties have some sales to Norwegian
customers, even though none of them are actually established in Technically, Norwegian law does not distinguish between friendly
Norway. Certain sector-related approvals may also be required – and hostile takeovers, and both friendly and hostile offers are
see question 1.4 above. As under the EU merger rules, an exemption accepted. There are, nonetheless, certain provisions in the STA to
rule, modelled on Article 7(2) of Regulation (EC) 139/2004 on which a bidder should dedicate extra review and attention whenever
the control of concentrations between undertakings, has been a “hostile” transaction is contemplated, hereunder in particular the
implemented. This exemption rule allows a public bid or a series of restrictions on a target’s freedom to make certain corporate decisions
transactions in securities admitted to trading on a regulated market once the board has been notified that an offer is imminent (see
(such as the OSE) irrespective of the standstill obligation. However, question 8.2 below). Even though most offers are recommended by
the bidder cannot at any time “exercise any form of control” over the target board, hostile offers do occur in Norway.
the target until the end of the standstill period following the filing.
Nevertheless, a bidder can use the voting rights to such shares to 3.2 Are there rules about an approach to the target?
protect its investment without being in violation of the prohibition
against exercising any form of control. The bidder cannot, during There are no statutory rules regarding a bidder’s approach to a listed
the standstill period, start integrating and coordinating the target’s target, and a bidder may freely approach either the board or the
future operations with the bidder’s own operations. majority shareholder of the target as the bidder sees fit. The standard
approach is that the bidder contacts the chairman of the target’s
2.15 What levels of approval or acceptance are needed? board of directors, in order to discuss the potential transaction
prior to initiating any type of offer process. The bidder will, during
As a starting point in all acquisitions, the articles of association such contact, attempt to convince the target’s board to recommend
(as well as any applicable shareholders’ agreements) in both the a potential offer and, if possible, try to obtain Irrevocables from
acquiring and targeted company should be examined as these may any board member being shareholders. If the board is hostile, the
contain provisions that give shareholders approval/refusal rights as bidder may instead try to liaise directly with one or two majority
regards proposed acquisitions/disposals of assets or shares. Once a shareholders whose shareholdings in the target makes them
tender offer has been put forward, there is no minimum approval/ necessary and key counterparties for a successful takeover.
acceptance threshold required (i.e. the bidder will basically “get In a hostile transaction where the board and/or certain influential
what he gets”), but the bidder will normally (in a voluntary tender shareholders will seek to frustrate/prevent potential takeovers, the
offer) make the offer conditional on achieving a minimum level key to success lies in securing “effective control” of the target. In
of acceptance, all depending on what control the bidder is trying this context, effective control means at least two-thirds of the voting
to obtain. To control the board of directors, the bidder needs rights at the general meeting, which is the majority requirement for
more than 50% of the votes; to amend the articles of association, the changing of a company’s articles of association (see question
he needs at least two-thirds of the votes and share capital; and to 2.15 above). Once effective control is secured, the bidder may,
carry out a minority squeeze-out, he needs more than 90% of the albeit as a secondary objective, try to obtain more than 90% of the
votes and share capital. It is therefore common practice to make votes in order to carry out a minority squeeze-out.
voluntary offers conditional upon a 90% acceptance level. Mergers,
demergers, and issuance of new shares or other subscription rights
3.3 How relevant is the target board?
will generally require approval by two-thirds of the votes and share
capital represented at the general meeting.
The target’s board has a key role and shall act in the best interests
of the company and its shareholders. How the board perceives the
offer and the offer price is thus very important. As mentioned in
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