SWEDEN Law and Practice Contributed by: Niclas Rockborn, Pär Johansson, Daniel Sveen, Arijan Kan and Erik Schwartz, Gernandt & Danielsson Advokatbyrå
7. Takeovers 7.1 Public-to-Private
are deemed sufficient), but are sometimes requested in transactions where there are UK or US elements. Typical warranty protection and RWI are outlined in 6.9 Warranty and Indemnity Protection . It is not common to have an escrow, reverse equity commitment letter, or other retention arrangement in place to secure the obligations of a private equity seller. Covenants Regarding Conduct of Business If there is a gap between signing and closing, a private equity seller usually assumes customary covenants regarding the target’s business being conducted in the ordinary course of business between signing and closing. Post-Closing Covenants As opposed to a corporate seller, a private equity seller typically resists giving non-compete and (to a lesser extent) non-solicitation covenants. This is in line with the principle of limiting all residual liability in order to achieve a clean exit. Furthermore, it is problematic for private equity funds to take on, for instance, non- competes, as it is their primary line of business to acquire and divest companies. If any such covenants are given, they are typically limited to non-solicitation of key employees for a restricted period of time, and do not extend to portfolio companies. A private equi - ty seller does, however, typically assume customary confidentiality undertakings. 6.11 Commonly Litigated Provisions Litigation is not common in relation to Swedish private equity transactions. The undertakings which private equity funds submit themselves to are usually limited, which limits the potential for litigation. The most commonly disputed provisions are related to purchase price mechanics. Closing balance sheets and other true-up mechanics are predominantly deter - mined by an expert appointed by the parties, and therefore are usually not subject to actual litigation. Warranty and indemnity claim-related litigation between the parties is also limited, partly due to the fact that RWI is commonly taken out. The most dis - pute-driving warranties are those relating to financial information and tax.
Public-to-privates in private equity transactions have become common in recent years. Examples of such public-to-private offers that have been announced in recent years are EQT’s bid on Fortnox (March 2025), CVC Funds’ and Waldakt’s joint bid on Resurs (June 2024), EQT’s bid on OX2 (May 2024), Greenoaks’ and Long Path’s joint bid on Karnov (May 2024), Stirling Square’s, TA’s and Macquaire’s joint bid on Byggfakta (January 2024) and Nordic Capital’s and CVC Funds’ joint bid on Cary Group (June 2022). In a public offer situation, the target board must observe its fiduciary duties, the principle of equal treatment of shareholders as well as the general prin - ciples of respect for the stock market and respect for shareholders’ rights to decide on a public offer. The target board also has certain information obli - gations, and must inform the stock exchange if an offer is imminent and likely to proceed. Leakages or rumours regarding a potential public offer may trigger an obligation for the target company to make a public announcement under the EU market abuse regulation. The target board must also, no later than two weeks prior to the expiry of the acceptance period, issue a public statement expressing its opinion of the offer and the reason for its opinion. The target board com - monly supports its statement with a fairness opinion from a financial adviser. There is a general prohibition on the target company to agree on “deal protection” measures and relation - ship agreements. Transaction agreements, other than customary confidentiality agreements, are therefore not common. 7.2 Material Shareholding Thresholds and Disclosure in Tender Offers If an investor acquires 5% (or more) of the shares or votes in a company whose shares are listed on a regulated market in Sweden, the investor will be obliged to disclose its shareholding (subject to certain exemptions). The same applies at each consecutive 5% threshold up to 30% and then at 50%, 66⅔% and
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