Through the Norwegian Act on Acquisition of Enterprises, governmental control with acquisitions is provided for, in order to secure stable and solid structures of ownership in Norwegian enterprises.

The Act on Acquisition of Enterprises authorizes the Ministry of Industry and Energy to reject an acquisition or impose certain conditions with regard to the acquisition. It should, however, be noted that the Ministry, under the former concession legislation, rarely rejected concession applications. (Less than 5% of the applications were rejected.) Although practice under the Act, which has only been in force since January 1, 1995, is rather limited, there is for the time being no reason to believe that the frequency of rejections will increase. It is our opinion that the authorities will be hesitant to impose restrictions and conditions which will restrain the free transfer of shares and the normal commercial development of the company.

In acquisitions of major Norwegian industrial entities we foresee that the Ministry of Industry and Energy will review the notification thoroughly and may require additional information before granting its approval on certain conditions. Such a procedure might take up to six months.

The Act on Acquisition of Enterprises applies to acquisition of shares in Norwegian enterprises, and acquisition of assets that implies taking over business activities in Norway. Norwegian enterprises are defined as business entities that must be registered in the Registry of Business Enterprises, with the exception of foreign enterprises.

Some enterprises will be exempt from the Act on Acquisition of Enterprises, among them banks, insurance companies and some other companies that are governed by other legislation that provides governmental control. Aviation and shipping companies are also exempt.

According to the Act on Acquisition of Enterprises, acquisitions that fall under the scope of the act must be notified to the Ministry of Industry and Energy within 30 days after entering into an acquisition agreement.

The obligation to notify will apply if the purchaser becomes the owner of more than one third, at least one half, or at least two thirds of all shares or shares with voting rights, and the following criteria are satisfied:

1. The company has a) more than 50 employees, or b) a turnover during the last year of more than NOK 50 million, or c) received aid of more than NOK 5 million from public authorities for research and development, for at least one single project during the last 8 years.
2. The company directly or indirectly owns more than one third of the shares or voting shares in companies as mentioned in no. 1.
3. The purchaser has also purchased shares (up to certain thresholds) in other companies of the same concern, and the companies together satisfy the criteria in no. 1.

The acquired company and its affiliates will be regarded as one unit with regard to the criteria of the Act on Acquisition of Enterprises (number of employees, turnover, etc.).

The employees must be informed about the acquisition, and that they will have the right to state their view on the acquisition to the Ministry.

A notification to the Ministry must include the following:

a) A copy of the acquisition agreement;
b) Information about the purchaser, including a description of the purchaser's business activities, the number of employees, annual accounts and company certificate;
c) The reasons for and the intentions behind the acquisition, including investment plans;
d) The implications of the acquisition for future activities and employment;
e) Copy of minutes of meeting in which the employees were informed about the acquisition;
f) Information about the company in which the shares have been acquired, or about the assets that have been acquired, including a description of the business activities, number of employees, annual accounts and statement and company certificate.

The Ministry may also request other information regarded necessary.

The purchaser may not exercise his voting rights in the acquired company until the deadline for possible interference by the Ministry has expired (approximately 30 days after the notification has been filed). There are also other limitations with regard to exercising the ownership rights in this period. This should be taken into consideration when preparing the transaction.

The content of this article is intended to provide a general guide to the subject matter. Several other issues should be taken into consideration in connection with acquisitions in Norway. Specialist advice should be sought about your specific circumstances.

Advokatfirmaet Selmer & Co. DA, Law Firm, Oslo, Norway. +47 22 42 64 90 (telephone), +47 22 33 63 10 (telefacsimile).