DENMARK Law and Practice Contributed by: Dan Moalem, Jakob Skafte-Pedersen, Poul Guo and Thomas Enevoldsen, Moalem Weitemeyer
provisions, an appropriate expert may be appointed by the court/tribunal (as applicable). Arbitration or Courts for Broader Disputes Contractual disputes beyond pricing matters, if any, carved out for expert determination, are typically resolved through either Danish courts or arbitra - tion, depending on the nature and complexity of the transaction. Arbitration is more frequently chosen in cross-border or sponsor-to-sponsor transactions due to its confidentiality, flexibility, and cross-jurisdictional enforceability. 6.4 Conditionality in Acquisition Documentation In Danish private equity transactions, deal certainty is an almost non-negotiable requirement. Consequently, a transaction will typically only be subject to a limited set of unavoidable conditions. The most common are mandatory and suspensory regulatory approvals, such as merger control clearance and/or FDI approv - al where relevant. These are generally structured as standard conditions precedent. Conditions related to financing are rarely seen. Buyers are generally expected to have certain funds in place at signing, and conditionality on financing is typically not accepted. Similarly, shareholder approval on the buyer side is uncommon, unless structurally neces - sary (eg, listed buyer entities or complex fund struc - tures). MAC or material adverse effect (MAE) provisions rarely occur. When included, they tend to be narrowly draft - ed and heavily negotiated. Their practical application is limited, and they are seldom invoked. Conditions relating to third-party consents (such as key contracts with change of control clauses) are very rare to avoid depositing the deal certainty with a third party. Only if a target is a “single-customer” business where the customer has a long non-terminable con - tract, you would see consent from a contract party as a condition precedent. In practice, parties often manage such risks through pre-signing co-ordination or post-closing covenants rather than as formal con - ditions.
In summary, the use of conditionality in Danish private equity deals is generally limited, reflecting a market where deal certainty is prioritised but also subject to case-specific negotiation dynamics. 6.5 “Hell or High Water” Undertakings “Hell or high water” undertakings are a standard sell- side starting point in Danish private equity led auc - tions. Whether or not to accept as a private-equity buyer is a balance between presenting an overall attractive offer and risk. Distinction Between Merger Control and FDI Parties often distinguish between merger filings (under Danish or EU rules) and FDI approvals under the Danish screening regime. Merger control procedures generally follow a more predictable framework with established timelines, whereas the FDI review process may involve a higher degree of discretion, including considerations related to national security. This also means that a private-equity buyer – especially if the target is not an ad-on nor a potential competitor of other portfolio companies – can accept a hard hell or high water undertaking for merger control clearances. In contrast, more efforts-based obligations rather than absolute requirements will often be the approach in relation to FDI clearance. Impact of the EU Foreign Subsidies Regulation (FSR) In transactions where an FSR filing may be relevant – for instance, in connection with public tenders or larger deals involving financial contributions from non- EU countries – parties may address the issue through specific undertakings aimed at ensuring timely and co-ordinated filings. Given the thresholds involved, the FSR regime has not yet had a significant impact on Danish private equity deals. 6.6 Break Fees Break Fees Break fees in favour of the seller are not a standard feature in Danish private equity transactions. When agreed, they are typically seen in larger or highly com - petitive processes, or in situations where the seller is exposed to material execution risk due to the condi - tional nature of the agreement, including if there is a real regulatory risk on the private-equity buyer side.
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