Sweden: Learn More About Integration And Influence Over Target Companies

Last Updated: 2 November 2018
Article by Hamilton  

A key concern of buyers in private M&A transactions is ensuring that until closing of the transaction the target business is run in a manner which protects the value of the target business and gives the buyer a certain degree of comfort that its plans for the target business are not impaired. This is typically achieved by way of certain undertakings by the seller in respect of the conduct of the target business for the period between signing of the transaction documents and closing. Such undertakings include at least an obligation to conduct the target business in the ordinary course. The buyer will normally also require that its consent be obtained for certain material business decisions and to receive information on the target business in order to prepare its integration and other post-closing actions during the interim period. When drafting and negotiating such undertakings, it is critical to take into account competition law aspects, in particular merger control, to avoid potential exposure to significant sanctions.

Merger control framework

Over the last couple of decades merger control has gone from being the concern of a few countries to a situation where merger control regimes exist in a very large number of jurisdictions across the world. Many of those regimes provide for a suspension obligation whereby the parties may not implement a transaction falling within merger control until such time as the competent authority has issued a decision to clear the transaction. This period is referred to as standstill. Depending on the jurisdiction concerned, failure to respect standstill (commonly referred to as "gun jumping") may result in significant financial penalties (and ultimately the risk that the authority will prohibit the deal, necessitating its breakup). Whilst for many years cases where sanctions were imposed were few and far between, in recent years competition authorities have become markedly more aggressive in their application of these rules.

Recent developments

Two recent cases have highlighted authorities' views on the scope of these rules.

In the Ernst & Young case, the Danish competition authority had taken issue with certain action taken in the context of EY's acquisition of KPMG's Danish activities. In fact, KPMG Denmark had terminated its cooperation agreement with the umbrella organisation KPMG International before the Danish competition authority's clearance decision. The authority viewed this as gun jumping and took a decision against the parties, which was appealed. The Danish court in the matter asked the European Court of Justice ("ECJ") for a preliminary ruling.

The ECJ took a narrow view of what could constitute gun jumping, limiting it to actions which "in whole or in part, in fact or in law, contribute to the change in control of the target undertaking". Even though certain actions may be ancillary or preparatory to the transaction, and may even produce effects in the market, it does not constitute gun jumping if it "does not contribute, as such, to the change of control of the target undertaking", i.e. if the parties by that action "have not acquired the possibility of exercising any influence on'" the target. Accordingly, the ECJ takes a rather narrow view of the scope of the gun jumping concept.

This can be contrasted with the European Commission's recent decision to impose fines of EUR 124.5 million on Altice for implementing its acquisition of Portugal Telecom before it had been cleared by the Commission. According to the Commission's press release, the conduct complained of included granting Altice veto rights over decisions concerning Portugal Telecom's ordinary business, actual exercise of influence by Altice over Portugal Telecom including instructions on how to carry out marketing campaigns and Altice receiving commercially sensitive information. Regarding sharing of such information, the Commission appears to view such information exchange as a means of exercising influence, and hence potentially gun jumping also in the sense of the ECJ.

The Commission's decision follows the French Competition Authority's 2016 decision to impose a EUR 80 million fine on Altice for similar conduct in the context of its acquisition of SFR, including i.a. intervention in SFR's operational management, development of joint strategies and release of commercially sensitive information.

Having regard to the above, and the increase in enforcement of these rules, buyers and sellers drafting and negotiating transaction documents in private M&A transactions should continue to exercise caution and thoroughly consider their obligations under merger control standstill as well as the fact that until closing the parties remain subject to the "normal" competition rules aspects of pre-closing arrangements. In particular, a buyer's right to influence operational decisions of the target company or to receive commercially sensitive information prior to closing should be carefully assessed. As regards sharing of commercially sensitive information, there are arrangements which can be put in place to ensure compliance, including setting up so called "clean teams" with the buyer's advisors which can undertake integration preparation. The Commission's decision in the Altice case has been appealed to the Tribunal and it remains to be seen what position the court will take in this matter.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions