NORWAY Trends and Developments Contributed by: Kai-Ståle Kristiansen, Pål Lieungh and Hedvig Moe, Advokatfirmaet Thommessen AS
Outlook The Norwegian defence sector is characterised by a rare combination of political will, allied demand and technological convergence. However, the picture is also reversed as price pressure, capacity constraints and long lead times are real challenges. The ability of European countries to convert budget increases into real defence capability will determine whether current growth projections materialise. For the Norwegian defence procurement framework, one central question is whether the existing regime – LOA, FOA/FOSA and RAF (together with the Article 123 exemption under the EEA Agreement) – is suf - ficiently adapted to an accelerated rearmament and a materially broader supplier industry. The market assessment mentioned at the beginning of this article shows that the industry need and wish for regulatory predictability, but it remains to be seen whether the authorities have the capacity to handle the increased volume of procurements, ownership notifications, personnel security clearances, facility security clear - ances and licence applications at the pace the market requires. Against this backdrop, the authors expect M&A trans - action volume in the Norwegian defence sector to increase materially. Heightened industrial coopera - tion requirements, constrained capacity among quali - fied sub-suppliers, and fragmented ownership in the lower-tier supply chain are favourable conditions for consolidation. Foreign contractors bound by indus - trial cooperation obligations will look towards capa - ble Norwegian partners, while financial investors and strategic buyers compete for security-cleared, pro - gramme-qualified businesses – driving deal activity from bolt-on acquisitions to transformative mergers.
viding multi-year revenue visibility. Norway’s largest ammunition manufacturer achieved record revenues with an order reserve of almost NOK55 billion, driven by rearmament and support for Ukraine. Capacity expansion is occurring simultaneously across multi - ple countries. Single procurements illustrate the importance of industrial cooperation in practice. Norway’s acquisi - tion of at least five British Type 26 frigates from BAE Systems – announced in August 2025 with an esti - mated value of approximately GBP 10 billion – is Nor - way’s largest ever defence investment. The UK gov - ernment has guaranteed industrial cooperation with Norwegian industry equivalent to the full procurement value through sub-contracts, technology cooperation and maintenance contracts over the vessels’ lifetime. For Norwegian sub-suppliers, this represents itself as a multi-decade pipeline of qualified opportunities. For investors evaluating Norwegian defence assets, the frigate programme demonstrates how major pro - curements can anchor long-term revenue visibility for Norwegian companies positioned within the industrial cooperation framework. The structure of the industrial cooperation is expected to emphasise partnership integration rather than discrete compensation, which may well signal the direction of travel for future major acquisitions. In the sub-supplier tier, order intake follows prime contractors. Buy-and-build platforms are consoli - dating fragmented, founder-owned supply chains in weapon systems integration, composite protection and precision components. The space domain is gain - ing importance, with Europe’s first orbital launch site at Andøya and increasing demand for autonomous underwater vehicles and dual-use technology.
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