Nordic vs. US M&A Market – Some Insights
We recently hosted a Nordic M&A Breakfast together with colleagues from other leading firms in Sweden, Norway and Denmark. The seminar was primarily addressed to US law firms and investment bankers to give our US colleagues some insights into the current private M&A market in the Nordics to ensure that they are better prepared when dealing with their Nordic counterparts.
Our breakfast event inspired lively discussions among our guests on the differences between our two markets. Some of the differences are apparent and almost always addressed in these discussions – these include deemed data room disclosure vs. disclosure letters or “pro and anti-sandbagging clauses”. However, there are also differences that are more related to the deal zeitgeist where “market practice” is less established and depends heavily on the deal climate.
The following differences are good to keep in mind when preparing for a Nordic-US deal:
- The locked box is almost never used as a purchase price mechanism in private deals in the US, whereas the locked box is commonly used in the Nordics, especially in auction processes.
- The deal’s conditions precedent will almost always include a MAC/MAE clause in the US, whereas we see a lot of Nordic deals signed without one.
- Although W&I insurance is used in the US, it is not as widespread and common as in the Nordics, and it is also clearly more expensive.
- The seller’s counsel will virtually never prepare a vendor due diligence report or a “legal guidance report” in the US, whether with or without reliance.
- The Nordic market is generally a much more seller friendly market than the US one, which may come as a surprise for many US buyers.
The breakfast was hosted at our New York office, which assists our clients on their corporate and financing transactions in the US. We have built and actively maintain an extensive network of relationship law firms, lawyers, and other advisors out of our New York office, together which we can handle transactions of any size for our Finnish corporate clients.