He was the son of Canute Lavard a chivalrous and popular Danish prince. His father was murdered only days before his birth.
As the rightful heir to the throne and with his rivals quickly gaining power he was raised at the court of Asser Rig of Fjenneslev together with Asser's son Absalon who would become his trusted friend and minister.
When Valdemar was sixteen years old King Erik III died and a civil war erupted. the pretenders were Sweyn, Canute and Valdemar (Holding Jutland as possession). The civil war wasn't decided for ten years.
In 1157 Sweyn hosted a great banquet for Canute, Absalon and Valdemar. This banquet was designed to dispose Sweyn of all his rivals. Canute was killed but Absalon and Valdemar escaped. Valdemar returned to Jutland were Sweyn quickly launched an invasion only to be defeated by Valdemar and killed in his flight. Valdemar had outlived all his rival pretenders and became sole King of Denmark
In 1158 Absalon was elected as bishop of Roskilde and Valdemar made him his chief friend and advisor. He reorganized and rebuilt wartorn Denmark and at the instigation of Absalon declared war upon the Wends who inhabited Pomerania and the island of Rügen. In 1168 the Wendish capital of Arkona was taken and the Wends became Christians and subject to Danish suzeranity. Danish influence reached into Pomerania.
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