Asset deals and transfer of undertakings: what to do in the first ten days comes down to three parallel tracks: confirm which employees, contracts and permits attach to the business being sold, open consultation with employee representatives before signing completes, and freeze any change to terms or headcount until the transfer date is fixed.
Who this concerns
This is written for the team on either side of a Swedish asset deal: a buyer acquiring a plant, a product line, a branch or a division rather than the shares in the company that runs it, and a seller carving that operation out of a wider group. It applies whether the buyer is a Swedish trade acquirer, a private equity vehicle, or a foreign group taking on a Swedish site for the first time. It also applies to sellers in financial difficulty who are disposing of an operating unit rather than filing it into insolvency, and to groups splitting a business ahead of a later sale.
The trigger is usually the same moment: the deal team has decided, for tax, liability or structuring reasons, that the transaction will be an asset purchase rather than a share purchase, and now has ten days or fewer before signing to work out what that decision actually transfers, what it does not, and what has to be done before the ink is dry rather than after.
What the law says
Under Swedish law as it currently stands, when an asset deal covers an operating business, or a distinguishable part of it that keeps its identity in the hands of the buyer, the employment relationships attached to that business transfer automatically to the buyer. The terms and conditions those employees worked under continue for a protected period regardless of what the sale and purchase agreement says about excluding staff or limiting headcount. This rule looks at substance rather than the label on the transaction: calling it an asset sale, a business transfer or a plant sale does not change the outcome if what is actually happening is the continuation of an economic activity under new ownership.
A separate consultation obligation sits alongside the transfer rule. Employee representatives are entitled to information and, where applicable, negotiation before the decision affecting the transfer is implemented, not after signing has already taken place. Treating consultation as a formality to complete once the deal is done reverses the sequence the rule assumes.
Contracts, permits and licenses sit outside this automatic mechanism. An asset deal does not, on its own, carry third-party contracts or regulatory permits across to the buyer merely because the underlying assets move. Each needs its own route under gällande svensk rätt: assignment with counterparty consent, novation, or in the case of permits, in many cases a fresh application in the buyer's name. This is the single most common source of a gap between what the buyer believed it was acquiring and what actually arrives on completion day.
How it works in practice
Day one: define what "the undertaking" actually is
Before anything else, the deal team needs a written description of the business unit being sold: which employees work exclusively for it, which contracts serve it, which assets, premises, permits and customer relationships belong to it as opposed to the wider group. This sounds administrative. It is the foundation for every decision that follows, because the transfer of undertakings analysis turns on whether what is being sold functions as an identifiable economic activity, not on how the purchase agreement schedules describe it.
Confirm employee transfer before anything else
Once the scope of the undertaking is fixed, identify every individual whose role is tied to it, including anyone on leave, anyone shared across two business lines, and anyone whose contract is silent on which part of the business they support. This list, not the organisational chart, is what determines who transfers by operation of law. Getting it wrong in either direction, either by assuming staff transfer who do not, or missing staff who do, creates liability that surfaces months later rather than at closing.
Open consultation on a realistic timeline
Information and consultation with employee representatives needs to start early enough that it is genuine, not a notification dressed up as consultation. In practice this means briefing representatives on the transfer, the reasons for it, and its consequences for affected staff before the transaction is finally implemented, and building the buyer's and seller's negotiating timetable around that requirement rather than treating it as something to fit in afterwards.
Map contracts asset by asset
Go through the material contracts one at a time and classify each: does it transfer with the business by operation of an assignment clause already in the contract, does it require the counterparty's consent, or is it silent, in which case default rules on assignment of contractual rights and obligations apply. Supply agreements, framework agreements and long-term service contracts are the recurring problem area, because a counterparty that discovers it can block the assignment gains leverage it did not have before the deal was announced.
Treat permits and licenses as a separate track entirely
Environmental permits, operating licenses and sector-specific authorisations are frequently personal to the holder rather than attached to the assets. A buyer that assumes a permit travels with the equipment it authorises can find itself operating without valid cover on day one after completion. This needs its own workstream, run in parallel with the employment and contract tracks, with its own application lead time factored into the closing timetable rather than assumed away.
Fix what happens to terms and conditions
Employees who transfer keep their existing terms for a protected period, and the buyer cannot use the transfer itself as grounds to worsen them. Any planned harmonisation of pay, benefits or working patterns across the combined workforce needs to wait until that period has run, and needs its own legal basis when it happens, not an assumption that new ownership resets the terms.
What changes when the buyer or the parent is outside Sweden
A foreign buyer, or a Swedish target with a foreign parent making the decisions, does not get a different set of rules. The transfer of undertakings and consultation obligations apply regardless of which law governs the purchase agreement and regardless of where the ultimate decision-maker sits. What does change in practice: consultation documents typically need to be produced in a form employee representatives can actually use, which in most cases means Swedish; information intended for a foreign works council or group HR function has to be relayed through the correct local channel rather than assumed to satisfy the Swedish obligation on its own; and permits generally require an entity established in Sweden to hold them, which can mean the buyer needs a Swedish vehicle in place before the transfer date, not arranged afterwards. Where the buyer is incorporated outside the EU or EEA, screening regimes applicable to foreign direct investment may add a separate approval step with its own timeline, and that step needs to be identified in the first ten days, not discovered close to signing.
The first irreversible step
Of everything above, one action cannot be walked back once taken: informing employees or their representatives that the transfer is happening. Once that communication goes out, the clock on consultation, on employee reactions, and on any resulting dispute starts running, and it cannot be paused to let the deal team catch up on the contract and permit mapping that should have happened first. Sequence the work so that this step comes after the scoping in the earlier stages, not before it.
Where a due diligence finding changes the answer
Findings that surface during due diligence, an undisclosed contract termination right, an environmental liability, a permit condition in breach, routinely change the price and the allocation of risk in the purchase agreement. How those findings feed into price is a separate question from what transfers by operation of law: a price adjustment does not alter which employees or contracts transfer, it only reallocates who bears the cost. The mechanics of that adjustment are covered separately in how due diligence findings change price under a Swedish deal.
Common questions in the first ten days
What does it cost if the transfer turns into a dispute with a counterparty or an employee?
Cost in this scenario is driven by how many parties are affected and how contested the underlying facts are, not by a fixed tariff. A single counterparty refusing an assignment is a different budget from a multi-party dispute over headcount that was supposed to transfer. The drivers behind that budget, and how funding for a dispute is typically structured, are set out in what a commercial dispute is likely to cost.
Does the asset deal affect permits held for an industrial or energy site included in the sale?
Yes, where the assets being sold include a physical operating site, the permits attached to it are frequently personal to the current holder rather than transferable with the plant. The buyer typically needs its own application, timed to run alongside the deal rather than after completion. The mistakes that most often cost time and money on this front are covered in permitting an industrial or energy project without losing time.
What is kapitalbrist and why does it matter if the seller is under financial pressure?
Kapitalbrist refers to a company's registered capital having fallen below a level that triggers specific obligations for its board. It matters in an asset deal because a seller operating under that pressure faces its own timetable and duties independent of the sale, which can affect how quickly it can complete, what warranties it can safely give, and how the price is structured. The term is explained in full in the glossary entry on kapitalbrist.
The numbers
The ten-day window in the title is a working sequence for the deal team, not a statutory deadline, and it is worth treating the days as a checklist rather than a countdown clock, because the underlying legal obligations are not measured in a fixed number of days from signing.
A practical breakdown looks like this. Days one and two: finalise the description of the undertaking, produce the employee list, and identify every contract and permit in scope. Days three to five: brief employee representatives, send assignment or consent requests to counterparties on contracts that require them, and file or prepare any permit applications that have a lead time. Days six to ten: resolve any counterparty refusals, confirm which permits will and will not be in place by the intended completion date, and finalise the position on terms and conditions for transferring staff.
What actually drives cost on a transaction of this kind is not the deal size on its own. It is the number of contracts that require active counterparty consent rather than transferring by an existing assignment clause, the number of employees whose role sits across more than one business line and therefore needs individual analysis, whether any permit has a processing time that does not fit the intended closing date, and whether a foreign buyer needs a Swedish entity established before completion rather than after it. Each of those adds work, and in a contested case, adds a dispute, which is a different cost category from the deal costs themselves.
Where it usually goes wrong
The most common error is treating the asset deal structure as a way to leave staff behind. It does not work that way where the business, or the part of it sold, keeps functioning under the buyer: the employees attached to it transfer regardless of the wording chosen in the purchase agreement, and an indemnity from the seller covering employee claims does not change who the claim is against in the first instance.
A close second is running consultation after signing rather than before implementation. Representatives who are told about a done deal rather than consulted on a proposed one can raise the process itself as a defect, independent of whatever the underlying commercial terms were.
A third pattern shows up with permits: the buyer assumes the deed of transfer for the assets carries the operating licence with it, discovers otherwise close to completion, and either delays closing or operates in a grey zone it did not intend to accept.
A fourth, specific to cross-border deals, is assuming that because the purchase agreement is governed by another jurisdiction's law, or because the ultimate buyer sits outside Sweden, the Swedish transfer and consultation rules apply more loosely. They do not. The governing law clause in the SPA has no bearing on whether Swedish employment protection rules apply to the affected staff.
Finally, price disputes that originate in due diligence findings are sometimes mistaken for transfer disputes. They are not the same problem: a finding that changes the price does not change who the employees, contracts or permits belong to after completion, and conflating the two slows down resolution of both.
What to do next
This covers the mechanics of the first ten days: what transfers automatically, what needs active steps, and where the process most often breaks down. It does not replace a review of the specific contracts, permits and employee list involved in a live transaction, because the analysis above turns on facts that are particular to each deal.
Where a live asset deal has a contract at its centre, whether that is a supply arrangement whose delivery obligations are unclear after the transfer, or a counterparty threatening to treat the deal itself as a termination event, the position on that specific agreement is worked through in what happens when a supply agreement delivery failure occurs.
For a transaction already in motion, the point where self-directed work stops and a document-level assessment starts is an initial review of the transaction documents. For the broader set of issues that arise across contracts and transactions work, the starting point is the contracts and transactions practice overview.