Sweden: A Corporate/M&A Overview

Introduction

Sweden’s M&A market continues to be attractive for both domestic and international investors. As a cornerstone of the Nordic economy, Sweden is characterised by its political stability, robust legal framework and commitment to innovation. The Swedish M&A market typically records around 1,500 announced transactions annually. Sweden is also recognised for its active IPO market and well-developed bond market. Combined with a strong technology sector, an expanding defence industry and a highly skilled workforce, these factors position Sweden as an established hub for M&A activity. Looking ahead, a continued strong pipeline of transactions is expected, particularly within the defence, technology and energy sectors.

Market Trends and Economic Conditions

The Swedish M&A market in 2025 was marked by high volatility, with deal volumes fluctuating as investors responded to geopolitical developments and changing macroeconomic conditions. Following a strong start to the year, deal activity moderated during the second quarter, before rebounding towards the end of 2025. This pattern broadly reflected trends seen across Europe, where shifting investor sentiment influenced transaction timing and execution.

The recovery in deal activity towards the end of the year supports a positive outlook for 2026. Increased spending on the defence industry, infrastructure and nuclear energy, together with continued access to capital, a resilient start-up ecosystem and sustained cross-border interest, positions Sweden well for continued M&A activity in 2026.

Private equity is anticipated to significantly drive deal flow in coming years. Elevated levels of dry powder and extended holding periods increase pressure on Nordic private equity funds to pursue exits, add-on acquisitions and alternative liquidity solutions, including continuation vehicles. In 2025, private equity-backed companies featured prominently in the IPO market, with two of the three largest Swedish listings being sponsor-backed. Notably, Verisure’s listing on Nasdaq Stockholm was the largest IPO in the EMEA region during 2025. Sweden also continued to lead the Nordic region in terms of IPO volume, total proceeds and first-day market capitalisation.

Technology-driven transactions remain a central feature of the Swedish M&A landscape. Stockholm’s well-established start-up ecosystems – often referred to as a “unicorn factory” – continues to generate high-growth companies and transaction opportunities. The Swedish unicorn Klarna, after postponing an earlier IPO attempt, completed its listing on the New York Stock Exchange in September 2025, marking one of the year’s most significant fintech listings. In parallel, 2025 represented an important year for Swedish artificial intelligence companies, with businesses such as Lovable and Legora attracting international venture capital interest and strengthening their market positions against their North American competitors.

The carbon-free energy sector has also seen increasing activity and growth, driven by Sweden’s policy shift towards expanded nuclear power generation and reduced reliance on fossil fuels. Nuclear energy is now regarded as an important component of Sweden’s strategy to achieve its net-zero target by 2045. Planned investments in new nuclear facilities, together with the removal of the ban on uranium exploration and mining, are expected to stimulate further investment and M&A activity across the energy sector.

Sweden’s open and export-oriented economy continues to attract foreign investors seeking a stable platform for European expansion. Against a backdrop of global trade tensions, Sweden’s reputation for innovation and institutional reliability has supported sustained cross-border interest, particularly from investors that seek to diversify their trade relationships and reduce dependence on single markets. Cross-border transactions are therefore expected to remain a defining feature of the Swedish M&A market, alongside continued public-to-private activity. This trend was illustrated by the USD5.5 billion recommended cash offer for Fortnox, launched in March 2025, one of the largest public-to-private transactions in Sweden to date.

The defence sector has emerged as an increasingly important driver of M&A activity. Following Sweden’s accession to NATO in 2024, the country is undertaking the most significant strengthening of its defence capabilities in decades. Defence spending is forecasted to reach approximately 2.8% of GDP in 2026, with an ambition to increase spending to 3.5% of GDP by 2030. This expansion has driven growing interest in defence, dual-use and adjacent technologies. Transactions in these sectors are expected to continue, supported by investments in infrastructure, supply chain resilience, nearshoring initiatives and the need to secure specialised expertise, while also attracting heightened regulatory scrutiny and thus the need for careful legal structuring.

Legal and Regulatory Developments

Corporate governance and regulatory developments remain key considerations in Swedish M&A transactions. After several years of increased legislative activity at both EU and national level – including the expanded application of the CSRD, enhanced ESG reporting obligations and evolving ethical standards – there have been renewed calls for regulatory simplification. The EU’s focus on improving industrial competitiveness, together with initiatives by the Swedish government to reduce administrative burdens, may signal a gradual shift towards deregulation.

The Swedish FDI Act, which entered into force at the end of 2023, continues to have a material impact on Swedish M&A transactions, particularly in the energy, infrastructure and defence sectors. While the regime has been criticised for its broad scope and lack of clarity regarding what activities are considered protection-worthy, market familiarity has improved. According to data published by the Inspectorate of Strategic Products, notifications increased by approximately 58% in 2025 compared to 2024, contributing to greater predictability in practice. Nevertheless, FDI screening remains a key structuring consideration, often affecting transaction timelines.

Opportunities and Challenges

In March 2025, battery manufacturer Northvolt filed for bankruptcy, representing one of the largest Swedish bankruptcies in modern times. Prior to the filing, Northvolt employed more than 6,500 people and had raised approximately USD15 billion from investors, positioning itself as a leading European challenger in the battery sector. The Northvolt bankruptcy, together with other green industrial start-ups facing financial difficulties, has contributed to increased caution among investors towards certain capital-intensive green industrial projects. At the same time, it has created opportunities for distressed and speculative investors.

Despite these challenges, the overall opportunity landscape remains favourable. Sweden’s continued emphasis on innovation, together with improving capital market conditions, supports a constructive outlook for deal activity in 2026.

Key Insights for Investors

Investors evaluating Swedish deal opportunities should consider the following factors:

• Valuation Strategies: Flexibility in valuation and deal structuring is increasingly important to address economic uncertainty, geopolitical risk and extended transaction timelines.
• Strategic Due Diligence: Enhanced and targeted due diligence, particularly in relation to regulatory compliance and security-related matters, is critical for successful execution.
• Talent Retention: Effective strategies for retaining key talent remain a significant determinant of post-transaction success and integration.

Conclusion

The Swedish M&A market enters 2026 on a stable footing, supported by a diversified economy, innovative industries and a well-established legal framework. While geopolitical uncertainty and regulatory complexity continue to influence transaction dynamics, the overall outlook remains constructive. With sustained cross-border interest and activity across key sectors, Sweden is expected to remain an active and attractive M&A market in the year ahead.