2021 saw an increasing number and value of M&A deals in Scandinavia and globally as a result of a number of factors such as pent-up demand from the pandemic in 2020, lots of cash in the market and low interest rates. The second half of 2021 was even stronger than the first. Consequently, buyer and seller confidence were also at an all-time high. We saw high levels of M&A activity across all sectors.

In Denmark, a strong economy combined with very low unemployment contributed to strong corporate balance sheets, earnings outlooks, and deal volumes. It was generally a sellers' market, with especially strong competition for certain sought-after assets in areas such as infrastructure, energy, technology, and "green" commodities.


Who were they? 

Bidders ranged from trade buyers to Scandinavia and international superannuation/pension funds and private equity funds and private investors. Superannuation Funds were involved in many of the largest deals in 2021. Private equity played a large part in public M&A globally, but a smaller role in Denmark and Sweden despite involvement in some of 2021's largest deals.

What was driving bidders?

Aside from the factors mentioned above, bidders in the Scandinavia market were looking for growth, scale, relevance in the market and synergies. ESG considerations (mentioned below) were also a key factor.

How did ESG impact bidders?

Both domestic and international bidders need to consider ESG trends and regulations when looking at investments. Internationally, ESG reporting requirements are being enhanced, particularly in the West. For example:

  • sustainability reporting will become mandatory for large or listed EU businesses (including subsidiaries based outside the EU or based in the EU but with a non-EU parent);
  • on 6 April 2022 the UK became the first G20 country to make it mandatory for large businesses to disclose their climate-related risks and opportunities, in line with Taskforce on Climate-related Financial Disclosures (TCFD) recommendations; and
  • on 21 March 2022 the U.S. Securities and Exchange Commission announced a proposal to mandate climate-related disclosures for public companies.

Recent crises in Europe and globally are also keeping ESG issues front-of-mind. This has arguably resulted in trends such as depressed demand for coal and other carbon-intensive assets and ESG-focused investment mandates and funds.

ESG appears to have been a key driver for notable transactions in 2021, particularly where a bidder or seller is looking to rebalance its portfolio or reduce risk.

ESG now also features heavily in the due diligence phase of a transaction, covering issues from climate change to modern slavery and gender equality. The ESG landscape is rapidly changing and while it is often looked at purely through a risk assessment/management lens, that perspective too is evolving. Key questions that any Board needs to consider in assessing a transaction are:

  • How does the target compare to competitors on ESG measures?
  • What opportunities may ESG synergies bring?
  • How could ESG themes affect the target's strategy and culture?
  • What would happen if ESG risks eventuate?
  • What are the potential compliance costs involved with ESG-related issues?
  • How are ESG regulations and investor preferences likely to change in the future?


The trend for most public M&A transactions to be on a "friendly" basis continued. Notable developments included a greater acceptance of dual scheme of arrangement/ takeover offer structures to counteract an initial bidder's pre-bid stake, and for two schemes of arrangement obtaining final court approval before all regulatory approval conditions were satisfied.

Although corporate balance sheets were strong and interest rates were at record lows during 2021, some of the largest equity capital markets deals in 2021 were undertaken to fund M&A activities.

Despite the sellers' market and strong M&A activity levels, buyers are in many ways more disciplined now than they were 10-15 years ago. They have been trying to put themselves in the strongest possible position. One way of doing this is through exclusivity periods and carve-outs.

However, target Boards have been reminded to run competitive processes. In a number of instances recently, exclusivity periods have been struck out. Nonetheless bidders continue to push for the strongest possible exclusivity because of the expense of and management focus required during due diligence processes.

While it is a deal-friendly market, regulators continue to play an important role. The consideration offered is generally the primary differentiator between competing bids, however the approvals required by regulators are a secondary consideration that may also extend the acquisition process.


For now, the level of M&A activity has not yet significantly slowed from 2021's pace. However, M&A activity levels in the remainder of 2022 are difficult to predict, particularly given increasing inflation and what this means for companies' financial position and interest rates, and the uncertainty created by the war in Ukraine and geopolitical tensions. In time, these factors could lead to distressed asset transactions, however for now the uncertainty is likely to be only a negative factor in terms of M&A activity. While uncertainty persists in the market, we expect that to introduce an element of caution and for bidders to be more patient. Nonetheless interest rates are likely to remain low by historical standards and there remain a large number of well-funded bidders in the market, from trade buyers to superannuation funds and private equity funds. Private equity funds are expected to play a larger role in Scandinavia M&A in 2022 given recent successful fundraising.

With COVID-19 borders restrictions lifting, there may be an increase in certain kinds of cross-border deals where the bidder deal team wants to interact in-person to understand the target company or asset as well as meet with regulators and key stakeholders, especially in jurisdictions where they are not familiar.

ESG considerations are likely to continue to be important for bidders and targets alike. In relation to decarbonisation, the scale of investment required to achieve targets agreed at COP26 should see continued activity. However, geopolitical tensions could also see sectors which arguably contradict the decarbonisation trend, like oil and gas, come back into favour at the same time.