13 March 2024

The Trend Of Global Carve-Out Transactions Remains Active

Castren & Snellman Attorneys


Castren & Snellman Attorneys logo
Castrén & Snellman is a law firm of 265 people based in Helsinki, and in other parts of the world we work with an extensive international network of law firms. We are a trusted advisor in mergers and acquisitions, disputes and other specialised fields of business law.
In a constantly evolving business landscape characterised by market fluctuations, carve-out transactions stand out as a compelling alternative...
Finland Government, Public Sector
To print this article, all you need is to be registered or login on

In a constantly evolving business landscape characterised by market fluctuations, carve-out transactions stand out as a compelling alternative for entities looking to streamline their operations and focus on and allocate resources to core business activities.

We have witnessed a significant increase in complex multi-jurisdictional carve-outs in recent years, and the trend of strategic reviews and divestment of non-core assets seems to continue also in the current market.

Carve-out transactions involve the separation of a business unit or division from its parent entity, often resulting in the creation of a standalone entity distinct from its parent entity or the integration of the divested business directly into another organisation. As complex legal undertakings, carve-out transactions require careful planning, structured project management and a deep understanding of the underlying legal questions.

We have compiled below some of the key legal considerations that should be taken into account when planning and implementing a carve-out transaction in multiple jurisdictions.


Separating a business unit or division requires identifying which assets, employees, commercial agreements, intellectual property rights, and premises belong to the business to be separated and are to be transferred with it. Each category of assets and agreements requires thorough legal analysis as regards transferability.

It is common that the business to be separated and the parent entity have shared assets that both entities are using. This often leads to detailed considerations regarding separation issues, such as the renegotiation of shared agreements, employee and union negotiations, and the negotiation of licensing arrangements with respect to shared intellectual property rights.


Structuring is an important first step of the planning phase whereby different structural alternatives for the transaction are analysed and ultimately decided on. These include cost and timeline aspects, regulatory requirements, and the overall complexity of implementing the final structure, among other things.


The business to be separated is typically dependent on certain services provided by the parent entity and may require transitional services for a specific period after the completion of the carve-out. Identifying the services that can be offered after the consummation of the transaction is critical, and the detailed terms for offering such services are captured in a transitional services agreement. It is key to carefully consider the underlying service and supply agreements when scoping out the terms and conditions for the transitional services.


The need for any approvals under foreign direct investment regimes and the filing of merger control notifications should be assessed early on in the process, as these aspects may have a significant impact on the overall timeline.

Depending on the line of business of the company, industry-specific approvals from or notifications to local authorities in different jurisdictions may also be required to validly consummate the transaction. The transfer of employees may also trigger the obligation to carry out cooperation negotiations or to inform or consult with employee representatives or unions.

If the business to be separated requires permits or licenses for its operations, the possibility to assign these in connection with the carve-out should be assessed. The same applies to any required actions for such permits or licenses to remain in force after the completion of the transaction.

Carve-out transactions typically include the assignment of agreements from one entity to another which, as a main rule, requires the counterparty's consent. In large transactions, the identification of the most material counterparties and the careful planning of the process to obtain consent play a key role in mitigating the risk that key agreements would be terminated by the counterparty.


Understanding the interrelation between different transaction documents and how they are linked together as well as ensuring alignment across these documents is crucial for a successful carve-out transaction. In addition to the main transaction agreement, local share or asset transfer agreements and transitional services agreements are typically required. Licensing agreements, service agreements, new employment agreements or other ancillary agreements may also need to be prepared.


We have extensive experience in advising clients throughout the entire lifecycle of a carve-out project, and we have been involved in some of the largest and most prominent carve-out transactions in the Finnish market. Our team's solution-oriented approach provides tailored legal solutions to guide clients through all the legal aspects of cross-border carve-out transactions, ensuring seamless execution and achieving the best possible outcome to the client. We frequently provide advice on both sell and buy-side carve-out transactions. Our team of legal experts has valuable insights in cooperating with legal advisors from multiple jurisdictions to combine legal knowledge into the best possible practical solutions for our clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

See More Popular Content From

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More