Denmark was among the fastest-growing economies in Europe in 2024. Record-high employment levels and high workforce participation, supported by an influx of foreign labor, have provided a solid foundation for the economy. And that has positively impact dealmaking there, with deal value surging 508% yoy in Q1. So, what’s behind M&A success in the region? Liam Sturges recently discussed what’s driving dealmaking in Denmark and the Nordics with Gitte Lansner, Kirsten Vedel Møller, Soren Mikkelsen, and Ning Li.

A solid approach

Despite easing inflation in the Nordics, dealmaking in the region experienced a 29.7% decrease in deal volume in Q1 year-on-year. Aggregate value, however, had the best start to a year over the same period. There was €33.1bn transacted between January and March, a substantial 120.5% increase compared to the €15bn in Q1 2024. And in Denmark, the number of transaction may have been 33% yoy, but aggregate value reached €14.4bn, a huge 508% surge.

Compared to other EMEA economies, this solidity is resulting in resilience. “On a relative basis, the Nordics appear to have been more resilient than DACH and the UK, which has been materially affected by macroeconomic weakness in Germany and the UK,” explains Vedel Møller.

In fact, in the UK & Ireland deal volume fell 21.6% yoy in Q1 and value was also down 28%. And while DACH fared better (deal volume fell 29.2% yoy, but value increased 51.3%), its economy remained stagnant in Q1 with expectations of only minimal growth this year.

“We see solid deal activity in Q1 in the Nordics, a continuation of increased optimism during H2 of 2024,” says Vedel Møller. “This is likely a reflection of a lighter macroeconomic outlook which has hampered dealmaking in past years, particularly due to high interest rates.”

Challenges ahead

And while those hurdles might have been cleared, others have appeared.

Regulatory constraints, particularly in Denmark’s energy sector, are proving to be a challenge. “The regulatory framework right now does not really allow for new technologies to develop,” says Mikkelsen. “It does not really allow for us to continue build-out of renewable assets. We have in the past been one of the leading nations for the green transition, and we want to maintain that position going forward.”

“We see a focus on long-term value creation – add-ons, consolidations and strategic focus – with large platform investments and exits still being hesitant,” says Lansner.  “Structured auctions are coming back though – but in rather unstructured ways.”

“Activity still appears fragile, as we see more new deals coming to market, but still see a tendency for longer due diligence processes and more deals going on hold,” explains Vedel Møller.

Technology as a transformer

Nevertheless, along with the pharmaceutical sector, one of the bright spots for dealmaking in Denmark has been technology. In Q1, the TMT sector led in deal volume and was the third-largest by value, accounting for three of the top ten deals by value in the country.

And while technology may be driving acquisitions for firms needing to enhance their digital capabilities, that’s not the only way it’s impacting dealmaking, says Li: “Tech and digital capabilities are no longer just operational concerns, they are often central to the deal itself. The ability of a company to demonstrate scalable tech platforms is going to be increasingly important to value realization and synergy harvest. Furthermore, leveraging the rapidly evolving AI-powered tools and solutions in the entire M&A process is going to be a transformation enabler.”

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