DENMARK Trends and Developments Contributed by: Morten Krogsgaard and Lennart Meyer Østenfjeld, Moalem Weitemeyer
Moalem Weitemeyer Amaliegade 3 DK-1256 Copenhagen Denmark Tel: +45 30 37 96 91 Email: morten.krogsgaard@moalemweitemeyer.com Web: www.moalemweitemeyer.com Introduction In late 2024, the Danish acquisition finance mar- ket experienced significant changes following what could be described as a quiet period in respect of new M&A transaction financing. The preceding years were marked by high inflation, rising interest rates and geopolitical tensions, which led to cautious market sentiment. How- ever, 2024 saw a resurgence in activity driven by strategic adjustments in financing structures and a focus on sustainable and resilient investment opportunities. By the end of 2024, increased M&A activity and increased acquisition finance as a consequence was expected. Despite this, the world remains uncertain, which is never favourable for M&A or lenders required to finance transactions. Impact of Global Events on Denmark’s Economic Stability Denmark, like other European countries, has been significantly influenced by fluctuations in international markets, which have affected investor confidence and business investments. The strong inflation observed in 2023 was pri- marily due to two high-impact factors: supply chain disruptions and the war in Ukraine. In both cases, this was exacerbated by the accompany- ing upwards pressure on wages.
Supply chain disruptions The COVID-19 pandemic disrupted global sup- ply chains, leading to increased prices for raw materials, products and transport. This disrup- tion caused a ripple effect across various indus- tries, resulting in higher production costs and higher consumer prices as a result. The effects were compounded by other disrupting events, such as the Houthi Red Sea attacks and increas- ing shipping and insurance costs. War in Ukraine The conflict in Ukraine led to higher global oil and gas prices, which in turn led to increased energy costs throughout Europe. The surge in energy prices added to the inflationary pressures already present due to the COVID-19 pandemic. Like in other jurisdictions, the key factors influ- encing the Danish market are, inter alia: • investor confidence: fluctuations in inter- national markets have led to a cautious approach among investors. The uncertainty surrounding global economic conditions has made investors more hesitant to commit to new ventures, impacting overall business investments in Denmark; • business investments: the combination of high inflation, increased borrowing costs and geopolitical tensions has led to a slowdown in
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