The acquisition process in Norway
In this article, we provide an overview of the transaction process in connection with different types of acqusitions or sales (shares or assets) of a private limited liability company in Norway.
This article is part of our Doing Business in Norway guide.
Introduction
Preparation is critical to a successful acquisition or sale. Before initiating a sale process, the seller may perform a vendor due diligence (“VDD”) to identify potential red flags and to ensure that the company is presented in a clear and credible manner to prospective buyers. In the absence of a VDD, the seller should address the following areas before initiating the process:
- Corporate housekeeping: review corporate structure, constitutional documents, authorities, and registrations.
- Financial readiness: ensure accounts, balance sheets, management reports and other financial information is complete.
- Debt and liabilities: map existing debt, guarantees and other liabilities, including any change-of-control or transaction-related implications.
- Tax analysis: map material positions, exposures and transaction consequences.
- Legal risk assessment: identify legal matters that may be deal-breakers or materially affect valuation, timing or structure.
- Process strategy: consider the most suitable sales process (e.g., structured auction vs. bilateral negotiations) and timetable.
For the seller, the next step is typically to prepare a short teaser. This is followed by a more detailed information memorandum (“IM”), often issued together with a process letter setting out the seller’s requirements, timeline and expectations. Typically, sellers engage corporate finance or M&A advisors to assist with defining the most appropriate strategic rationale for initiating the sale process.
For the buyer, it is important to obtain sufficient information as early as possible to submit an offer on a well-founded basis. The buyer should initiate workstreams early, including finance discussions with its bank, and consider any Norwegian restrictions on financial assistance in connection with the transaction.
Non-binding indicative offer (NBO)
A non-binding indicative offer (NBO) is often given to form the basis for negotiations between the parties. In addition to key commercial terms, the offer will often include conditions like satisfactory due diligence and specific closing requirements.
The bidder must decide if the offer should be binding or whether it is subject to conditions. If no reservations are included, an offer may become binding if the material terms are sufficiently clear and the seller accepts it within the acceptance deadline.
The seller and buyer will have different interests: the seller wants deal certainty, while the buyer wants flexibility until it has completed its investigations and secured internal and external approvals.
Typical reservations include:
- board/financing approval;
- satisfactory due diligence;
- agreement on final transaction documents, and
- a condition that no binding agreement exists until a share purchase agreement has been signed.
Letter of intent (LOI)
On the basis of the NBO, parties discuss entering into an LOI. The LOI is often referred to as a term sheet, heads of terms or memorandum of understanding. From a buyer’s perspective, exclusivity throughout further negotiations is key, whereas sellers want flexibility towards several potential buyers. The purpose of a LOI, is to set out the main commercial terms that the parties intend to agree and to establish a framework for further negotiations addressing:
- the transaction structure;
- due diligence;
- timetables;
- price and costs;
- conditions and reservations;
- governing law and dispute resolution;
- exclusivity;
- confidentiality, and
- responsibility for preparing the first draft of the share purchase agreement.
Confidentiality
The seller will normally require that the buyer to sign a non-disclosure agreement (“NDA”) before sharing detailed information about its company. The purpose is to prevent misuse of information disclosed during the transaction process. An NDA is typically entered into by the parties prior to the potential buyer submitting its first NBO.
An NDA should regulate:
- who is bound by the confidentiality obligations;
- the extent of the confidential information;
- how the information may be used;
- who may receive the information;
- duration, and
- consequences of breach.
Due diligence
The purpose of due diligence (“DD”) is to verify the commercial assumptions the buyer based it’s offer on and to identify risks. The scope of the review is normally defined by the buyer. The buyer or its advisers prepare a request list, and the seller uploads relevant information to a virtual data room.
Following the review, the buyer’s advisers will usually prepare a report summarising findings. Depending on the buyer’s needs, this may be a full DD report or a shorter high-level “red flag” report focusing on material issues only.
When the DD is complete, the parties can negotiate the transaction agreement. If several potential buyers have been involved, the seller may request a final binding offer together with the buyer’s mark-up of the seller’s draft agreement for negotiations.
Transaction agreements: share purchase (SPA) or asset purchase (APA)
Depending on the outcome of buyer’s DD and risk analysis, parties agree on typically two different types of transaction agreements: an SPA or an APA. The choice typically depends on the seller’s preference for assuming potentially historic liability in the target company, but other considerations may also play in to the assessment. Both agreements are comprehensive and require professional assistance in order to structure each sides interests and risks. To reduce risk, parties often discuss entering into W&I insurance, where warranty and indemnity claims from buyer to seller are generally made against an insurer.
Closing and post-closing
At closing, both parties perform their obligations under the agreement. In a share sale, ownership is transferred by updating the company’s shareholder register. In an asset deal, ownership is transferred by the buyer assuming all ownership risk on the assets. The closing process may be handled directly between the parties or through a settlement agent, typically a broker or lawyer acting as a neutral intermediary.
After closing, the seller must monitor any remaining warranty obligations. The buyer should focus on taking control of the company, including:
- understanding day-to-day operations;
- establishing contact with key service providers, and
- following up adjustment mechanisms.
Next steps
At Brækhus we regularly assist companies and investors throughout the transaction process, including drafting LOIs and NDAs, assisting with the DD process, drafting and negotiating the share purchase agreement and closing. A well-managed transaction process reduces uncertainty, helps the parties identify risk early and creates a better basis for successful ownership after closing. Contact us today for an informal discussion on how we may assist.
Last updated: 06 July 2026
