The deal pipeline continues to be strong in Norway, with an increasing number of planned divestments in the next couple of years
There were 55 M&A transactions in Norway in Q1 2018, which is a 17% decline in volume compared with Q1 2017. The decline in deal volume seems partly to be a result of a more volatile stock market because of increasing interest rates and the risk of geopolitical tension at the beginning of 2018. The total reported deal value for Q1 2018 ended at EUR 1,050 million, which is also significantly down from the total reported deal value for Q1 2017 of EUR 5,677 million. However, 2017 was an exceptionally good year for deal-making in Norway, with record levels in both the number and value of M&A deals.
We continue to see strong deal drivers, such as technological innovations and digital disruption both in Norway and the global markets in general. There were a few notable transactions during Q1, in particular Blackstone Group LP’s EUR 805 million acquisition of an undisclosed stake in Mime Petroleum, a Norwegian hydrocarbon development and production company.
During the past few years, a large part of Norwegian deal volume has come from inbound cross-border deals, and during the first four months of 2018, inbound cross-border deals comprised 47% of the total number of transactions. This is a slight increase in percentage compared with inbound cross-border transactions in the first four months of 2017, which accounted for 42% of the total deal volume. However, foreign players continue to be prevalent, particularly in parts of the M&A market. This shows that many Norwegian businesses possess technology and knowledge that foreign investors consider attractive, in particular from a bolt-on acquisition perspective.
There has not been much change in the market for M&A deals. Nevertheless, large auction processes continue to be slightly less common than they were 36 months ago. In the past two to three years, we have observed an increase in the use of more tailored sales processes, particularly within the oil and gas segment, involving one or a very limited number of participants rather than full auction processes.
Aabø-Evensen & Co has contributed to The Mergers and Acquisitions Review since 2012. Read about the above mentioned and more in the newly released and updated Twelfth edition by clicking here. The Norway chapter covers not only the recent trends and developments in the M&A market for both public and private deals, but also provide you with a valuable go to legal guide for doing M&A transactions in Norway.
Reproduced with permission from Law Business Research Ltd. This article was first published in August 2018. For further information please contact nick.Barette@thelawreviews.co.uk