M&A deals in Sweden, as in any other European country, necessarily include the due diligence procedure of the target object before the agreement is concluded. Any legal entity planning to conclude an M&A deal, or an investor intending to invest money in a business, must be 100% confident in the profitability and reliability of the proposed deal. This confidence can only be gained by learning all the detailed information about a potential partner. Due diligence is carried out to collect and analyze such data. If you are planning to start a business in Sweden, you may find this blog post helpful.
Due diligence in Sweden
Due diligence of a company in the EU is traditionally focused on deep immersion in such aspects of the target's activities as:
- current financial condition;
- financial statements;
- tax situation;
- legal issues;
- operating activities;
- the effectiveness of the management system and policy pursued by the company;
- position of the company in the market and competitive advantages.
Let's take a closer look at the legal due diligence of a company registered in Sweden, which often includes analysis:
- property rights;
- the legal structure;
- the terms of financial agreements;
- IP and licenses;
- real estate;
- contracts with employees;
- cases of dispute settlement in the EU involving the target.
In a controlled auction process, sellers often provide a due diligence report form called a “legal advice report”. This allows the seller and management of the target company to expedite the process of selling the Swedish company and to proactively assess and resolve any issues that may arise during such a review.
An agreement to transfer the assets of a company in Sweden (or shares) usually limits the seller's liability to only those clear guarantees set out in the contract. This excludes the seller's liability for pre-contractual or misleading statements (other than willful misconduct).
Publicly available information
Due diligence of a company in Sweden often involves searching for public information. Please note that companies must file a wide range of documents with the Swedish Registrar of Companies, among which you will find:
- annual reports;
- information about the current and previous representatives of the company;
- information about shares and authorized capital and changes in them;
- the legal status of the enterprise;
- information about the ultimate beneficial owners.
It is also worth noting that Swedish cartographic, cadastral registers contain detailed information on all immovable property in Sweden.
You can find out more detailed information about M&A regulation in Sweden by studying the materials on this topic on our website or by signing up for a personal consultation with our specialists. The experts of IQ Decision UK are ready to provide comprehensive assistance in conducting the due diligence procedure in Sweden and other EU countries.