NORWAY Law and Practice Contributed by: Karoline Ulleland Hoel, Sigurd Opedal, Ole Henrik Wille and Daniel Nygaard Nyberg, Wikborg Rein Advokatfirma AS
AIFs are also subject to the asset stripping provi - sions under the AIFMD/AIF Act, meaning that there are limitations on distributions, capital reductions, share redemptions and acquisition of own shares by EU-incorporated portfolio companies during the first two years following acquisition of control by an AIF, individually or jointly together with other AIFs. There are other provisions of the AIF Act that also apply, but the aforementioned often impact private equity funds. Merger Control In accordance with Norwegian merger regulations, companies must notify the Norwegian Competition Authority (NCA) of concentrations where the com - bined Norwegian annual turnover of the undertakings concerned exceeds NOK1 billion and at least two of the undertakings concerned have an annual Norwe - gian turnover exceeding NOK100 million. Transactions triggering a notification cannot be closed until they have received clearance from the NCA. The NCA may also, within three months of a final agreement/acquisition of control, call in for review transactions falling below the turnover thresholds if the NCA has reason to assume that competition will be affected. It is also possible to voluntarily notify the NCA of a transaction, although this is rarely done. No notification is required to the NCA if the parties meet the thresholds for a mandatory notification to the European Commission under the EU Merger Regula - tion, or if they need to make a notification to the EFTA Surveillance Authority. Foreign Direct Investment The current Security Act (SA) provides that entities handling classified information, controlling informa - tion, information systems, objects or infrastructure that are of vital importance to fundamental national functions, and/or engaging in activities that are of vital importance to fundamental national functions, shall be designated as subject to the SA. Then, where at least one-third of the shares in that company are subject to an acquisition, whether by a Norwegian or foreign
acquirer, the acquirer must notify the relevant ministry or National Security Authority about the transaction. In addition, entities providing goods/services of sig - nificant importance to fundamental national functions or national security interests may be made subject to the SA. In either case, the relevant provisions of the SA only apply where the target entity has been desig - nated as being subject to the SA by formal decision. There is currently no public register of entities that have been designated, and so an acquirer must ask about designation during due diligence. A number of changes to the SA have been proposed, but are not in force yet. These changes include: (i) a standstill obligation, preventing the closing of an acquisition until the relevant ministry has provided its approval for the investment; and (ii) a lowering of the threshold for when a notification is required, to a 10% stake, with recurring filing obligations arising when the ownership stake passes one-third, 50%, two-thirds and 90%. The EU Foreign Subsidies Regulation The EU Foreign Subsidies Regulation does not apply to purely Norwegian transactions, unless the target also operates in EU. The relevant thresholds are: • the acquired company, one of the merging parties, or the joint venture must generate turnover (on group level) in the EU of at least EUR500 million; and • the parties to the transaction must have been granted combined aggregate foreign financial con - tributions of at least EUR50 million over the past three years. The European Commission takes the view that foreign contributions received from the Norwegian govern - ment are relevant for determining whether the latter threshold is met. Where the thresholds are met, notifi - cation must be made to the Commission. The Foreign Subsidies Regulation has been relevant in large-scale Norwegian transactions since coming into force, for example, Permira’s and Blackstone’s offer for the out - standing shares in Adevinta.
469 CHAMBERS.COM
Powered by FlippingBook