DENMARK Trends and Developments Contributed by: Morten Jensen, Elise Ross-Hansen, Frederik André Bork and Paula Grønlund, Bruun & Hjejle
Introduction to the Danish M&A Market Denmark is generally an attractive market for M&A and foreign investment due to its strong economic fundamentals and business-friendly environment. Denmark has: • a small but highly educated population of 5.9 million people; • a stable regulatory and political environment; • a competitive corporate tax rate of 22%; • strong government support for green energy; • a large pharmaceutical and life sciences sec - tor; • a robust financial sector; • a well-established “flexicurity model” that provides businesses with labour market flex - ibility while ensuring strong social security protections for employees; and • an open and export-driven economy, with key trading partners in the EU, the UK and the USA. Denmark’s economy is heavily oriented towards exports, with pharmaceuticals, renewable ener - gy technologies, shipping and agribusiness being among the largest contributors. The coun - try has a long-standing reputation for innova - tion and ranks highly in ease-of-doing-business indexes. The Danish government has actively encouraged foreign investment, particularly in sustainability-focused industries, making it a prime target for investors. Private equity funds continue to play a very active part in the Danish M&A market. This M&A market is also characterised by transactions involving corporate actors, the large Danish pen - sion funds as well as Denmark’s well-established family offices.
Private equity firms are expected to continue to play a significant role in the Danish M&A market in the coming years, due to the substantial capi - tal reserves these firms possess. Private equity firms are also expected to play an essential role in fostering innovation within the Danish market. By investing in new technologies and forward-thinking business models, these firms can help drive the next wave of industrial and technological advancements in Denmark. This is particularly relevant in sectors such as renewable energy, biotechnology and fintech, where Denmark has already established itself as a frontrunner. On a general basis, the Danish M&A market typically features a mix of large, mid-sized and smaller deals, but small and mid-market trans- actions historically dominate in terms of volume. Review of 2024 Throughout 2024, Danish assets attracted sig - nificant investor interest, particularly in the fol - lowing industries: • technology, media and telecommunications (TMT); • engineering and industrial products; • business and professional services; • defence; • life sciences; and • real estate, hospitality and construction. In contrast, sectors such as power and utilities as well as consumer products experienced lower M&A activity, likely due to challenges in securing acquisition financing. The Danish M&A market displayed remark - able resilience amid geopolitical uncertainties, rebounding from the previous year’s slowdown.
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