NORWAY Law and Practice Contributed by: Fredrik Lykke, Christian P. N. Fenner and Magnus Brox, Advokatfirma DLA Piper AS Norway
Consultation should take place prior to any firm deci - sion being taken and should therefore occur as early in the process as is required in order for a meaningful consultation to take place – ideally before signing. In practice it is very often done immediately after signing. An asset deal will constitute a TUPE transfer. In an asset deal, the previous employer and new employer are obliged, as early as possible, to inform and consult with elected representatives of the employees, with a view to reaching agreement. Both the former employer and the new employer are also obliged to inform the affected employees as early as possible. The aim is to provide the employees with an opportunity to influ - ence the decision. 2.6 National Security Review There is currently no general national security review process in relation to acquisitions of targets in Nor - way. However, pursuant to the Security Act (which entered into force in 2019), the authorities have the right to classify businesses as important for national security, and thereby request notifications for approval of acquisitions when a business: (i) handles classi - fied information; (ii) has control of information, infor - mation systems, objects or infrastructure that are of vital importance for fundamental national functions; or (iii) engages in activities that are of vital impor - tance for fundamental national functions. Typically, this may apply to undertakings that play a particularly important role in maintaining key societal functions and interests, such as infrastructure for key utilities such as water and power, electronic communications, defence, health, etc. As a general comment, it is fair to say that the “nation - al security” rules with respect to general acquisitions in Norway are less stringent than in the other Scan - dinavian countries. However, if a target is, in fact, a business being affected by such rules, the process, tests and assessments are more or less the same as those applied elsewhere in Scandinavia. The purpose of the Security Act is to protect Norway’s sovereignty, territorial integrity and democratic system of government and other national security interests, as well as to prevent, detect and counter activities which present a threat to security. A key element in ensur -
ing this is ownership control enshrined in the Security Act, where the intention is to prevent unwanted par - ties from gaining insight, influence and/or control over information, values and functions that are of impor - tance/relate to national security. Ownership control pursuant to the Security Act entails that there is a duty to notify when acquiring a qualified ownership interest (currently one-third, a reduced threshold of 10% has been enacted but is not yet in force) in undertakings that are made subject to the Act. The undertakings subject to the Security Act are currently determined by decisions by the respective ministries. This means that these undertakings are then obliged to establish a proper level of safety. Screening under the Security Act applies to the busi - ness/target as such, irrespective of the nationality of the acquirer. However, the Norwegian authorities may intervene against a transaction, irrespective of thresholds or whether a company has been made subject to the Security Act’s filing obligations. The purpose of the right to stop acquisitions is to give the authorities an opportunity to control ownership “[a]ctivities that are of vital importance for fundamental national functions” and typically encompass critical infrastructure com - prising targets that provide systems, assets, process - es, technologies and/or services which are necessary to uphold certain socially important functions in, inter alia, energy and health. The only publicly known Nor - wegian case where the Government has intervened is the Bergen Engines matter, in which the Government in 2021 blocked the sale of Bergen Engines, a sup - plier of marine diesel engines, to a Russian-controlled buyer. If an acquisition causes a “not insignificant” risk to national security interests, the Norwegian government may block the transaction, or decide that the invest - ment may only be implemented subject to conditions. Recent Developments Given some recent geopolitical developments, nation - al security issues, ultimate beneficial ownership issues and sanction rules are in focus in a large percentage of all M&A activities.
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