NORWAY Law and Practice Contributed by: Karoline Ulleland Hoel, Sigurd Opedal, Ole Henrik Wille and Daniel Nygaard Nyberg, Wikborg Rein Advokatfirma AS
1.2 Market Activity and Impact of Macro- Economic Factors As outlined in 1.1 Private Equity Transactions and M&A Deals in General , the Norwegian M&A market has remained notably stable over the past year, show - ing less volatility than other Nordic markets despite persistent macroeconomic headwinds. Elevated inter - est rates, inflationary pressure and geopolitical uncer - tainty have affected deal dynamics, but overall activ - ity levels have held up, driven by a well-capitalised private equity sector, significant levels of dry powder, and a more domestically focused transaction land - scape. The Norwegian private equity market features all types of transactions found in mature global markets. His - torically, the oil and gas sector has been a key part of the Norwegian transaction landscape. Although green transition has dampened volumes in recent years, stabilised oil prices and shifting energy priorities in Europe have revived investor interest, with the supply and services segment expected to follow. An emerg - ing trend the last year has been increased investor attention to the defence and security sector, where private equity investments in areas such as defence technology, cybersecurity and autonomous systems have accelerated. According to PwC reports, the Nor - wegian defence industry now accounts for nearly half the turnover of the Norwegian aquaculture industry, underlining its growing relevance for future deal flow. Historically, about two-thirds of Norwegian M&A deals have had a cross-border element. However, Norwe - gian cross-border activity has declined steadily since early 2023, with notable rise in domestic transactions, as mentioned in 1.1 Private Equity Transactions and M&A Deals in General . While inbound deals (foreign buyers acquiring Norwegian targets) still outpace outbound cross-border transactions, the balance is gradually shifting amid increased regulatory complex - ity and a more cautious cross-border environment, despite the currency-driven valuation currently still favouring foreign buyers. Exit activity has remained modest, consistent with the global private equity market’s record high exit back - log. However, narrowing valuation gaps and expecta - tions of interest rate cuts later in 2025 have begun
to positively influence market sentiment, potentially setting the stage for accelerated deal-making in com - ing quarters. Exits remain dominated by trade sales to industrial buyers and secondary sales to other private equity funds, rather than IPOs. Continuation vehicles have become increasingly com - mon as a strategic tool in the current constrained exit environment. These structures provide liquidity to existing limited partners while allowing managers to retain and further develop high-performing assets, reducing pressure for premature exits. As investor acceptance grows and the market matures, continu - ation vehicles are expected to further develop and remain a central feature of the secondary private equity landscape. Looking ahead, private M&A activity in Norway is expected to remain relatively strong, owing to the resilient Norwegian and broader Nordic economies, active intraregional deal environment, an optimistic deal pipeline, and sufficient capital available across both debt and equity markets. These factors posi - tion Norway and the Nordic region as one of the more stable and attractive destinations for private equity investment globally, with continued strong interest from US and European sponsors. 2. Private Equity Developments 2.1 Impact of Legal Developments on Funds and Transactions Ownership in Bank or Life Insurance Company Norway has a long-standing administrative practice restricting any single shareholder from owning more than 20–25% of a Norwegian bank or life insurance company (or financial groups comprising such enti - ties), unless the shareholder is a financial institution. On 11 July 2024, the EFTA Surveillance Authority (ESA) referred Norway to the EFTA Court, arguing that the ownership ceiling practice violates the EEA Agreement. Amendments to the Financial Institutions Act took effect from 1 July 2024, but the ownership ceiling practice remains.
466 CHAMBERS.COM
Powered by FlippingBook