DENMARK Law and Practice Contributed by: Simon Milthers, Thomas Bøgedal Kristiansen, Mikkel Friis Rossa and Emil Steenberg, Bech-Bruun
If an asset sale involves collective bargaining agree- ments, the acquirer can opt out by following specific procedures. Non-competition and non-solicitation restrictions are allowed within employee protection rules, including limited duration and compensation, with non-poaching enforceable for six months post- closing. Denmark does not have a mandatory works council system, but companies with more than 35 employees must establish a co-operation committee if request- ed. Although the committee’s opinion is non-binding, the company must inform and consult on significant employee changes. 7.7 Currency Control/Central Bank Approval Denmark does not have currency control regulations or require central bank approval for M&A transactions. 8. Recent Legal Developments 8.1 Significant Court Decisions or Legal Developments Litigation in Danish M&A transactions is rare – although claims under W&I insurances in private deals are ris- ing. Many private M&A agreements include arbitration clauses to maintain confidentiality. Recent changes in technology M&A are driven by stricter FDI regu- lations, enhanced ESG standards for gender diver- sity, and tighter General Data Protection Regulation (GDPR) and privacy regulations affecting data-driven businesses. Recent practice imposes stringent requirements for thorough due diligence on the part of the buyer, as acquisitions of companies into a corporate group necessitate awareness that violations of the GDPR may result in fines calculated based on the entire group’s total worldwide annual turnover. Both recent EU and Danish case law confirm that the maximum fine should be calculated based on the total group turnover. The Danish High Court recently issued a decision in a leading case concerning the calculation of fines for GDPR infringements. The case involved a furniture chain’s breach of GDPR obligations due to its failure to
delete personal data from a legacy system. The Dan- ish High Court, referencing a preliminary ruling from the Court of Justice of the European Union (C-383/23), concluded that the fine should be calculated based on the turnover of the corporate group rather than the turnover of the individual legal entity. As a result, in the context of an acquisition, the buyer is exposed to the risk that the target company’s GDPR violation may result in a fine calculated on the basis of the entire corporate group’s turnover. GDPR infringements may impose fines up to EUR20 million or 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher. In Danish technology M&A, the due diligence scope has widened beyond classic IP and GDPR due dili- gence to include operational resilience and regula- tory readiness. Buyers now look deeper into cyber- security governance, third-party risk management, incident readiness and reporting, business continuity, and board oversight with strong focus on NIS2 and, for financial-sector or ICT-relevant target companies, DORA. This new focus is driven both by new regulatory risks (supervisory measures, fines, mandated remedia- tion) and by reputational risk and the need to protect the core operations and supply chain post-closing. In practice, there are more requests for evidence of NIS2/DORA gap closure plans, control performance metrics, and contractual measures related to security obligations. 9.2 Technology Company Due Diligence Publicly listed companies are allowed to provide bid- ders with the information necessary to conduct their due diligence. However, bidders who are competitors of the target company must limit access to sensitive information through “clean team” procedures. They must also comply with the rules on disclosure of inside information and prohibition of insider dealing, which may restrict share acquisitions outside the bidding process, and generally ensure compliance with the EU Market Abuse Regulation. 9. Due Diligence/Data Privacy 9.1 Due Diligence Process
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