NORWAY Law and Practice Contributed by: Karoline Ulleland Hoel, Sigurd Opedal, Ole Henrik Wille and Daniel Nygaard Nyberg, Wikborg Rein Advokatfirma AS
4.2 Vendor Due Diligence VDD is common for private equity sellers in structured sales processes. Conducting a VDD helps in identify - ing and addressing any material findings before the transaction commences. Presenting a VDD report to potential bidders gives them detailed information early, enabling informed offers within tight timeframes and providing some level of comfort related to the target’s business. In Norway, VDD reports typically take the form of tra - ditional issue-based reports or more descriptive fact books of the target group. Such reports are normally provided by sell-side legal advisers in structured sales processes. When VDD reports are available, advisers often rely on them and conduct buy-side due diligence on a confirmatory or “top-up” basis (ie, to verify or further explore the VDD findings). The final buyer and finance provider are often offered VDD reports for reliance. Private equity funds in Norway typically acquire com - panies through share purchase agreements as well as shareholder agreements applicable to joint invest - ments by the fund, any co-investors, and manage - ment shareholders. Prior to negotiating long forms, the parties typically enter into a term sheet and non- disclosure agreement. Compared to auction sales, the terms of the acquisi - tion in privately negotiated transactions are generally quite similar. In auction sales, the transaction agree - ment typically contains fewer conditions precedent as bidders will use this as a tool to make their bid more appealing to the sellers. In public deals, to reduce transaction risk, the acquisi - tion is often carried out by material shareholders and members of the management and board owning tar - get shares agreeing to pre-accept the offer, followed by a public offer. A transaction agreement entered 5. Structure of Transactions 5.1 Structure of the Acquisition
into by the bidder and the target board setting out the terms and conditions for the offer is the norm for friendly takeovers in the Norwegian market, where, inter alia, the board pre-agrees to recommend the tar - get’s shareholders to accept the offer. Close to 75% of all voluntary tender offers approved by Euronext Oslo Børs from 2008 to July 2025 (completed and uncom - pleted) were made on this basis. If the bidder is unable to achieve 100% control through a voluntary tender offer, the bidder may, on certain conditions, opt for a squeeze-out; see 7.6 Acquiring Less Than 100% . 5.2 Structure of the Buyer In Norwegian acquisitions the private equity-backed buyer entity (acquisition vehicle) is almost exclusively structured as a Norwegian private limited company ( aksjeselskap ), set up as a single purpose vehicle (SPV) for the transaction (BidCo). Foreign funds with foreign managers also often invest in the BidCo struc - tures through separate holding structure in, for exam - ple, Luxembourg or the UK. Depending, inter alia, on the transaction financing model and other commercial factors, the Norwegian acquisition structure usually consists of either only BidCo or also a set of holding companies (MidCo and/ or TopCo). The choice of acquisition structure is usually deter - mined by which structure would allow for the most efficient return on investment upon exit. This depends – in addition to tax efficiency in respect of the acqui - sition, duration of investment and exit (such as rules on deductibility of interest, withholding tax, VAT and thin capitalisation) – on a number of factors, including financing, governance structure, the existence of co- investors, risk exposure, corporate liability, disclosure concerns, and regulatory requirements. Normally, if external financing is obtained, a structure that pro - vides a single point of enforcement of the pledge of shares in BidCo for the finance provider is applied (eg, a BidCo, MidCo and/or TopCo structure). The private equity fund itself is rarely involved in the documentation of the transactions (save for execu - tion of equity commitment letters to confirm that the BidCo structures will receive necessary funding to consummate the transactions). Most often, the des -
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