SWEDEN Trends and Developments Contributed by: Louise Rodebjer, Ólafur Steindórsson, Per Dalemo and Johannes Wårdman, CMS Wistrand
CMS Wistrand Stockholm CMS Wistrand Jakobsbergsgatan 24 111 44 Stockholm Sweden Tel: +46 8 50 72 00 00 Email: sthlm@cms-wistrand.com Web: cms.law/sv/swe/
Introduction The Swedish M&A market experienced a turbulent year in 2025. After a promising start supported by fall - ing interest rates and accumulated deal pressure, the market was disrupted in the first half of 2025 when the US administration announced sweeping tariffs against the EU and much of the rest of the world. However, the second half of 2025 saw a strong recovery, and the year ended on a positive note. Throughout 2025, many Swedish private equity com - panies continued to hold portfolio companies, creat - ing pent-up pressure for divestment. The so-called “Liberation Day” tariff announcements in early April 2025 caused significant market disruption and ini - tially suppressed deal activity. The subsequent tariff agreements signed over the summer reduced the risk of escalation, allowing deal confidence to return. By the end of 2025, the Swedish economic recovery was firmly under way, and the outlook heading into 2026 is broadly positive. As anticipated, the defence industry, the energy sec - tor and AI were the standout themes for M&A in Swe - den throughout 2025. Sweden’s defence spending reached approximately 2.4% of GDP in 2025 and is set to rise further, with the government announcing an 18% increase in defence appropriations for the 2026 budget – the most comprehensive reinforcement of Swedish defence since the Cold War. This historic ramp-up in government procurement has created significant M&A opportunities for defence technology companies and suppliers. Sweden’s established posi - tion in dual-use technologies and its Saab-anchored
industrial base have made it a particularly attractive destination for defence-related investments. The trend of deals taking longer has continued throughout 2025. Earn-out models and vendor loans – which gained prevalence amidst prior market vola - tility – remain common tools for bridging valuation gaps as buyer and seller expectations diverge. As 2026 begins, deal structures are gradually normal - ising, though purchase price mechanisms bridging expectation gaps remain standard practice. Sweden as a Market The economy in Sweden is dynamic. Sustainability, equality and innovation play a fundamental role in the Swedish economy and business culture. Sweden’s economic recovery began in late 2024 but was inter - rupted in early 2025 by the US tariff shock. Despite this, real GDP grew approximately 1.6% in 2025, and the recovery regained momentum in H2 2025, driven by rising real wages, lower interest expenditure and accommodative fiscal policy. The Swedish Central Bank (Riksbanken) completed a substantial easing cycle, cutting rates from 4% to 1.75% before paus - ing in October 2025. Real GDP growth is projected to accelerate to 2.6% in 2026, supported by increased household consumption and a major defence invest - ment programme. Inflation is expected to fall sharply in 2026, partly due to a temporary VAT reduction on food. Sweden is known for its strong, stable economy, underpinned by a diverse industrial base and a high standard of living. Companies looking to acquire Swedish companies can tap into this stability, ben -
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