M&A Market status YTD 2019

The Norwegian M&A market in the first three quarters of 2019 continued to demonstrate its high activity level with several larger transactions, a significant volume of medium sized and smaller transactions and the high-profiled take-over of Oslo Børs.

Main trends | 2019

In terms of general market trends, we noted the following main developments during the period:

Following strategic updates and portfolio reviews, several large blue chip companies are contributing to the high activity level through carve-outs of parts of their businesses in order to refocus on their core businesses. According to market observers, this is partly due to increased pressure from activist investors and partly a desire to provide a way to add shareholder value in a low growth environment. By way of examples, Yara announced that it will explore a spin-off of its nitrogen business representing 10-15% of the Group's EBITDA and Rolls Royce completed the sale of its Commercial Marine business to Kongsberggruppen.

The high activity level within the PE-sector with fierce competition for the most attractive targets and high pricing of the assets continued during the period with EQT's sale of Autostore as the most notable transaction during 1H 2019. We also expect PE-sponsors to continue to seek add-on investments for their Norwegian portfolios.

A prominent example of the latter was the recent acquisition of ExxonMobile's field interests on the NCS by Vår Energi, a company partly owned by HitechVision.

· The combination of Eidsiva and Hafslund
· Vår Energi's acquisition of the remaining field
interests of ExxonMobile on the NCS

Notable M&A transactions

Thommessen is advising Eidsiva and Vår Energi (together with its owners ENI and HitecVision) on these transactions.

Notable M&A transactions in the first part of 2019

The combination of Eidsiva and Hafslund represents a milestone transaction in the renewable energy sector, creating the largest grid company (DSO) in Norway by far and the second largest hydro power producer in Norway.

Vår Energi's acquisition of the remaining field interests of ExxonMobile on the NCS with a transaction value of USD 4.5 billion represents a landmark transaction in the Norwegian market and is one of the largest transactions on the NCS ever. As a result of the acquisition Vår Energi will become the second largest company on the NCS with a production of 300,000 barrels/day.

Also worth noting is the sale of Autostore by EQT which represents a very successful PE-exit illustrating the ability of the PE players in Norway to identify the right targets, develop them and realise values in spite of the fierce competition within this segment. Thommessen advised EQT on the transaction.

Take-over of Oslo Børs

During this period Thommessen also advised Oslo Børs VPS Holding ASA in connection with the high profile take-over battle between Euronext and Nasdaq, which resulted in Euronext's acquisition of the only stock exchange and CSD operator in Norway. Naturally, the transaction caught a lot of attention due to the important role of the stock exchange for the capital markets in Norway.

Transaction structure

Although the jury is still out, we register two notable trends pertaining to the transaction structure/contract practice within M&A during the period:

Increased use of various "earn-out" models. This development is natural both because the future earnings of the businesses being divested is uncertain due to the general market volatility and because "earn outs" is an effective tool to bridge the gap between the sellers' expectations and the buyers' view on the valuation of the businesses in a volatile and uncertain market.

Continued use of locked-box accounts as the preferred basis for determination of the purchase price (as opposed to completion accounts) and more than 60% of our transactions during the period were based on this concept. The development is first and foremost driven by the parties' desire for simplicity and the sellers' desire for certainty about the final purchase price to be realised. However, paired with the uncertainty related to future earnings described above it will come as no surprise to us if the locked-box model mainly will be used for transactions with a relatively short period between signing and closing.

Thommessen is a leading advisor within mergers & acquisitions


Thommessen's mergers & acquisition practice has year after year been leading the market. Our full-service M&A practice advises within the whole spectre of mergers and acquisitions, from private M&A transactions to public M&A transactions. We stay continually in the forefront, both in terms of number and value of deals.

We have expertise within all areas that may be affected by a transaction. We regularly lead the largest M&A projects in the market, using our own developed project management model and the newest cutting-edge technology to improve processes and deliver exceptional results to the clients.