DENMARK Trends and Developments Contributed by: Simon Milthers, Thomas Bøgedal Kristiansen, Mikkel Friis Rossa and Emil Steenberg, Bech-Bruun
In cases of non-compliance, the Danish Compe- tition and Consumer Authority holds the author - ity to levy fines that can reach up to 6% of the company’s global turnover. However, such sub- stantial fines are typically reserved for severe
ments, including transactions involving owner- ship, control over shares, voting rights, asset transfers and long-term loans. The regime is particularly relevant for technol- ogy M&A transactions involving sectors sensi- tive to national security or public order, such as defence, IT security, dual-use products, criti- cal technology, and critical infrastructure. The broad definition of “other critical technology” extends to areas such as AI, industrial robotics, drone technology, semiconductors, cybersecu- rity, energy technologies, quantum technology, nuclear technology, nanotechnology, biotechnol- ogy, and 3D printing for industrial components. However, technologies developed for consumer products that are widely available are generally exempt from these stringent requirements. The screening process is divided into two phas- es to expedite uncritical cases. Phase I involves an initial review where the DBA grants approval within 45 days if no risks are identified. Phase II is initiated if further investigation is necessary, extending the review period to up to 125 days. Additionally, a pre-screening option is available for investments not involving critical technology or infrastructure. This takes approximately two to three weeks and requires less information than the full pre-approval process. The DBA retains the right to investigate trans- actions up to five years post-completion to determine if they should have been filed for pre- approval. If a transaction has bypassed neces- sary filings, it is deemed illegal and a full FDI filing is required. Consequences of non-com- pliance include the publication of the investor’s details, nullification of voting rights, unwinding of the investment, or state expropriation of assets with compensation.
and persistent breaches of the DSA. Growing influence of private equity
Private equity and venture capital funds are increasingly becoming key players in driving technological advancements through M&A. These investment funds are actively seeking opportunities in the tech sector, motivated by the potential for substantial returns and signifi- cant growth. Private equity and venture capital funds typically target companies that demon- strate strong growth potential, possess innova- tive technologies and have scalable business models. In recent years, there has been a notable increase in private equity- and venture capital- backed M&A transactions within the technology sector. These funds provide not only the nec- essary capital but also strategic expertise and operational support to their portfolio companies. By leveraging the resources and knowledge of private equity and venture capital funds, tech companies can achieve enhanced performance, expand into new markets and strengthen their competitive positions. Danish foreign direct investment regime The Danish foreign direct investment (FDI) regime, governed by EU Regulation 209/J452 and the Danish Investment Screening Act (Inves- teringsscreeningsloven), has introduced signifi- cant regulatory measures that directly impact M&A. Effective from 1 July 2021 and amended on 1 July 2023, this regime is administered by the Danish Business Authority (DBA) and man- dates pre-approval for direct and indirect invest-
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