NORWAY Trends and Developments Contributed by: Fredrik Lykke, Christian P. N. Fenner and Magnus Brox, Advokatfirma DLA Piper AS
Norway is heavily dependent on its O&G revenues, which directly finance more than 20% of the national budget. The country has had a very open economy for cen - turies, initially due to its shipping and fish exports. Further, since early 1900, Norway, and particularly its west coast, has been the preferred location for metal smelters, given its waterfalls and access to cheap electricity, drawing investment from large US, UK and French companies. O&G resources were discovered from the late 1960s, leading to further interest and investment from US, English and French oil companies. For a long time, there has therefore been a high level of foreign-owned businesses in Norway. Much of this has been through greenfield operations, with a good share also via M&A (private equity (PE) and trade). Although the largest number of investments come from Sweden, the UK and the US, Norway sees active owners from all over the world. A very open economy and significant interaction with international investors has also meant that the coun - try’s M&A documentation is heavily influenced by US and English-style drafting, although its transaction documents are much shorter. Typically, a share pur - chase agreement and a shareholders’ agreement are 30-35 pages in length. Norwegian, Nordic, European, UK and US private equity firms are active in Norway, and this has influ - enced Norwegian transactional market buyer candi - dates. There are, in general, few deal hurdles and there is lit - tle red tape in Norway, including under the National Security Act for business. FDI/national security interest considerations tend to be less significant in Norway than in other Nordic countries, and will continue to be so also after implementation of the tightened regime. 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.
In general, there are few export/import controls, including FDI issues, save for the national security regulations. Trends Private equity investors focus on roll-ups, with their platform investments acquiring add-ons to merge founders up into the platforms. There has also been a focus on accounting/audit firms recently, with some of the “Big Four” and Belgian firm BDO’s sale of various offices (mainly handling smaller clients) and PE structures trying to consolidate the market by acquiring numerous smaller players. Software, other services and energy-related business - es remain in high demand. Real estate development business in Norway is still experiencing difficulties. Norway is increasingly leveraging Artificial Intelligence (AI) to manage tasks such as enabling sustainable data centre cooling. Consequently, AI data centres have been a hot topic for the government and among investors for the last couple of years, with crypto min - ing falling increasingly out of favour. Given the sudden rise in demand over the last few years for green energy, and for electricity in general, electricity has become a scarce resource in Norway. New industrial initiatives have been introduced to fight for the right to receive electricity, which has become a political issue. Up to now, the general approach has been one of “first come, first served”, and the cause of the bottleneck has been grid capacity. The debate re-emerged recently after Google initiated a major project in south-eastern Norway. It is clear that inves - tors considering greenfield operations in Norway now need to focus on whether they can secure sufficient energy. This was not a material issue some years ago. The government appears to be scaling back on its green policies, and it is becoming increasingly diffi - cult to develop hydropower, wind/solar and battery production as the state and municipalities tighten sub - sidies and/or regulatory approvals. Ongoing criticism of the government’s “active business assistance” has increased significantly in parallel with high public spending. Poor outcomes, particular within battery
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