SWEDEN Trends and Developments Contributed by: Johannes Wårdman and Erik Frykenholt, CMS Wistrand
Act specifically targets activities which are sensitive to national security interests. Partners wishing to conduct business which may fall under the PSA Act (eg, military activity, electrical supply, food and water supply, healthcare, the handling of security-classified information and any other innovation or product that is of key importance to a security-sensitive activity) through a JV must enter into a protective security agreement and consult with the relevant supervisory authority beforehand. Failure to do so, or if the rel - evant supervisory authority deems that the JV would give rise to the creation of risks that cannot be suf - ficiently mitigated by the operator (the party responsi - ble for the security-sensitive information/activity), may result in the supervisory authority denying the creation of the partnership altogether. Both the FDI Act and the PSA Act have added com - plexity and both monetary and time-related costs for actors already in or looking to enter the Swed - ish market. It has also become apparent that many investment notifications submitted under the FDI Act are irrelevant for screening purposes and may be exempted from the notification obligation altogether. Competition law considerations JVs must also be assessed under both Swedish and EU competition law. A JV may require pre-closing merger control clearance if it qualifies as a “full-func - tion joint venture” – ie, an independent economic enti - ty with sufficient resources and autonomy to operate on a market. If the parent undertakings meet relevant turnover thresholds, the JV must be notified to and cleared by the Swedish Competition Authority (SCA) or the European Commission, depending on jurisdic - tional scope. Even where merger control is not triggered, JV arrangements between competitors may still raise concerns under Article 101 of the Treaty on the Func - tioning of the European Union (TFEU) or Chapter 2 of the Swedish Competition Act, particularly if they involve co-ordination of competitive behaviour. This includes information exchange, price setting or mar - ket allocation. However, exemptions may apply – for instance, JVs established for joint R&D activities that generate pro-competitive efficiencies.
The European Commission’s guidelines on horizon - tal co-operation agreements offer useful guidance on acceptable JV structures and conduct. Legal review should be carried out both at the formation stage and periodically, particularly when the market behaviour or ownership composition of the JV changes. Gun jumping and transaction timing A particular risk which foreign investors should be mindful of is gun jumping – ie, the premature imple - mentation of a JV prior to obtaining required merger control or FDI approvals. This may include early inte - gration steps such as joint marketing, strategic align - ment or shared control over sensitive assets before the relevant authority has issued a clearance decision. Gun jumping can result in severe penalties and retro - active invalidation of transactions. To mitigate these risks, parties should incorporate suspensive conditions into their JV agreements and clearly define permitted pre-closing conduct to main - tain compliance throughout the transaction timeline. Reflections and Outlook: JVs as Vehicles of Strategic Innovation Looking ahead, the landscape of Sweden’s joint ven - tures is set to evolve in response to global, regulatory and sectoral developments. While macroeconomic indicators during the first half of 2025 reflect modest growth and some lingering volatility across the EU, the Swedish economy has shown resilience, under - pinned by high export value from the industrial sector, increasing innovation output, and a growing interest from international investors. A striking example of Sweden’s strategic relevance is Lyten’s recent acquisition of Northvolt, which has sent strong signals across the cleantech and energy storage industries. The transaction not only highlights Sweden’s growing position in the global battery value chain, but also underscores the potential for foreign capital to enable significant industrial scaling. North - volt, once a symbol of Swedish energy innovation, is now set to expand its technological footprint under new ownership – a move likely to spur further joint venture activity in associated areas such as green hydrogen, electrified transport and circular manufac - turing.
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