While the initial German occupation of Arendal took place without serious incident, panic broke out the following day and led to many civilians abandoning the town, following unfounded rumours of an incoming British bomber raid.

[2] In the plans for an attack on Norway presented on 29 February 1940 to Hitler by General von Falkenhorst, Arendal was one of the Norwegian towns and cities to be captured in the initial invasion wave.

Rio de Janeiro, a covert troopship en route to Bergen with 313 Luftwaffe personnel and anti-aircraft guns, had been intercepted and torpedoed off Lillesand by the Polish submarine Orzeł.

The regional newspaper Agderposten, based in Arendal, ran an extra edition on the Rio de Janeiro sinking and reports of German fleet movements off Southern Norway.

[8] The German force tasked with the capture and occupation of Arendal was the 90-strong 234th Bicycle Squadron of the 163rd Infantry Division, commanded by Rittmeister Smith von Wesentahl, with an attached unit of ten signals personnel.

[14] Although spotted by customs personnel as she made her way through the narrows leading to the town, the reports of the intruding warship did not reach Lieutenant Holthe on board Jo.

Norwegian neutrality rules regulated that since Arendal was not a protected war port, Lieutenant Holthe was required to have orders before opening fire at any intruder.

As he had no orders or information to act on, and Jo was in an unfavourable position to attack, the torpedo tubes of the moored naval vessel pointing inland, Lieutenant Holthe refrained from opening fire.

During the short time Greif spent in Arendal, Lieutenant Holthe on Jo considered carrying out an attack, but avoided engaging due to the fire power of the German warship, and the numerous civilian onlookers crowding the quay area.

[13][20] As they took control of the town without encountering any opposition, the Germans also seized a cache of rifles which had been used by the Norwegian authorities to provide military training to civilian volunteers in the months prior to the invasion.

[21] After Greif had left Arendal, Lieutenant Holthe took Jo out of the harbour and set up an ambush east of the town in case the German warship came back in that direction.

The three torpedo boats spent the next eight days trying to support the Norwegian land forces being mobilized in Telemark county, surviving several air attacks during the time.

After considering evacuating the torpedo boats to the United Kingdom, and dismissing the idea as infeasible, Lieutenant Holthe and the other commanders scuttled their vessels off Lyngør on 17 April.

[13][Note 1] Although the population of Arendal had reacted calmly to the German invasion, rumours soon began to circulate about a supposed Allied bombing raid scheduled for 12:00 on 10 April.

[23] The German landing force were housed in a school building, and Rittmeister von Wesentahl arranged meetings with the local Norwegian authorities to ensure their cooperation in accordance with the rules of occupation.