SWEDEN Trends and Developments Contributed by: Louise Rodebjer, Ólafur Steindórsson, Per Dalemo and Johannes Wårdman, CMS Wistrand
efiting from Sweden’s robust infrastructure, a well- educated workforce, and a highly developed legal and regulatory framework. Furthermore, Sweden’s business-friendly environ - ment and transparent corporate governance practices offer a strong foundation for successful acquisitions. Swedish companies are also highly integrated into the EU’s single market, providing access to a broad range of customers and suppliers across the continent. It is primarily companies based in neighbouring Nordic countries and other European countries that have a presence in Sweden; European companies account for 86% of foreign-owned assets in Sweden. Judg - ing by the statistics, holding companies – primarily those in Luxembourg and the Netherlands – are large investors, though in most cases the controlling parent company will be located elsewhere (sometimes even in Sweden). Legal agreements for M&A processes in Sweden are usually relatively straightforward by international standards. Swedish contracts and agreements are generally less complex and shorter than US or UK equivalents, though Swedish M&A documentation is continuously influenced by US- and English-style drafting and is becoming longer and more complex. Typically, a purchase agreement or a shareholders’ agreement is 30–40 pages long. Transaction and legal costs are competitive and lower than in many coun - tries. There are no stamp duties on share or asset transac - tions (except on direct real estate transfers – which rarely take place as real estate is transferred via hold - ing companies). Business dealings in Sweden are marked by willing - ness on both sides to achieve consensus. Swedes consequently do business by collaborating and through consensus. This can lead to a lot of discus - sions as reaching wide agreement is an important part of the decision-making process in Swedish business activities. Allowing enough time for meetings and building relationships is key when doing business in Sweden. Swedish organisations are often flat and
strive for harmonic organisational culture. Business meetings are often casual and relaxed. Information on a target company’s annual accounts, share capital, articles of association, real property and floating charges is readily available from public reg - isters. An effective arbitration and court system provides for rapid settlement of disputes and conflicts, with arbi - tration being the general route for solving any M&A- related disputes. The transaction market in Sweden has continued to be impacted by the rules for protecting domestic/EU companies. These rules are discussed further below. The Swedish FDI Act Since 1 December 2023, Sweden has had a law in force on foreign direct investments ( Lag (2023:560) om granskning av utländska direktinvesteringar ) (the “FDI Act”). The FDI Act established a notification require - ment that covers a wide range of mergers, acquisi - tions and other types of investments in Sweden. The screening authority is the Inspectorate of Strategic Products (ISP). The definition of an investment in the FDI Act is broad and includes various means by which an investor/ buyer can gain influence in a target company. For investments in limited liability companies, the FDI Act applies if the investment results in the acquisition of voting rights equal to or exceeding 10%, 20%, 30%, 50%, 65% or 90%. The Swedish FDI Act also applies to an investment by an existing owner (exceeding one of the thresholds), intra-group transactions and asset deals. Among the sectors that fall within the FDI Act are: • pharmaceuticals and medtech; • schools and education; • healthcare and social care; • mining; • nuclear power; • space; • battery industry; • communication infrastructure;
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