CSN: cash bid plus pre-committed swap is one deal, fails share-exchange cap

C Ab made a public cash takeover bid for the shares of BVero, a company subject to public trading in an EU Member State. The applicant, A Ab, held shares in BVero and belonged to the investor group behind C AbVero. Together with one other group company, A Ab held less than half of B's shares and votes before the bidVero; the other group members and C Ab held none. A Ab did not tender its B shares in the bidVero. Under the applicable securities-law takeover rules, A Ab, as a representative of the offeror side, could not itself be the target of the public bid. Instead, before the bid was announced, A Ab had irrevocably committed to transfer all of its B shares to C AbVero in exchange for newly issued C Ab sharesVero as soon as possible after C Ab declared the bid unconditional and the acquisition of the tendered B shares had been completed and settled. The agreed value of the shares corresponded to the bid price.

During the offer period, holders of less than half of the B shares owned outside the investor group tendered to C Ab, and C Ab decided to implement the bid in accordance with its terms. The question was whether the cash bid counts as a separate transaction from the share exchange carried out and settled after it, or whether the cash consideration paid in the bid must be taken into account when assessing the conditions for a tax-neutral share exchange, having regard also to the interpretative effect of the EU Merger Directive (2009/133/EC).

The Central Tax Board (Centralskattenämnden) referred to the Court of Justice judgment in C-321/05 Kofoed, under which cash payment in the directive means monetary payments that by their nature constitute genuine consideration for the acquisition transaction, irrespective of any motives behind it (para 28), and forms an essential part of the consideration the acquiring company pays to the target company's shareholders in order to obtain a majority (para 29). It further relied on HFD 2020:71, HFD 2014:151 and CSN 115/2001: where target shares are agreed to be acquired in the same context partly for cash and partly for shares, the steps belong to a single whole, and the maximum cash amount is computed for the arrangement (the acquisition transaction) as a whole rather than separately for each transferor. Government proposal RP 125/2025 rd on raising the cash cap confirmed that the computation method is not intended to change: cash is still assessed consistently at arrangement level.

Because A Ab had irrevocably committed before the bid to transfer its B shares for share consideration if the public cash acquisition completed, the Board treated C Ab's acquisition of B shares — partly through the public cash bid and partly for share consideration — as one single acquisition transactionVero through which C Ab acquired the majority of the target's sharesVero. The cash paid in the public bid and the share consideration paid to A Ab were therefore both consideration for the same acquisition transactionVero. As a consequence, the cash exceeded 50 per cent of the own capital paid corresponding to the shareholding transferred in the arrangementVero, and the arrangement could not qualify as a share exchange within the meaning of 52 f § of the Business Income Tax Act (lagen om beskattning av inkomst av näringsverksamhet)Vero.

The advance ruling covers tax years 2026 and 2027. It is not final and was published only as a short summary. Legal basis: 52 f §(1)–(2) of the Business Income Tax Act; Articles 2(1)(e) and 8(1) of Council Directive 2009/133/EC of 19 October 2009.