The technology M&A market in the Netherlands has shown resilience compared to global trends, though it has faced some challenges similar to those seen in other sectors. Over the past few years, global M&A activity, especially in the technology sector, slowed due to economic pressures such as inflation, rising interest rates and stricter regulatory scrutiny. However, the Netherlands has performed relatively strongly, with deal volumes in the technology, media and telecommunications (TMT) sector seeing a slight increase in the past year, even though the total value of deals dropped significantly.

Over the past 12 months, several key trends have emerged in the technology M&A landscape in the Netherlands, reflecting broader global shifts while also showcasing unique regional characteristics.

• Increase in mid-market deals: The Dutch tech sector has seen a steady focus on mid-market transactions. Despite the global decline in deal values, mid-sized deals remained relatively robust, particularly in the software and IT services segments, which continue to be highly attractive for investors.
• Regulatory pressures: Regulatory scrutiny has increased, particularly for larger tech deals, as Dutch authorities align with EU regulations to curb monopolistic behaviours and protect market competition. This has extended the timeline for larger deals and deterred some larger deals from proceeding.

Please also refer to the Netherlands Trends & Development chapter in this guide.

In general, new-start-up companies are incorporated in the Netherlands. This is due to its favourable entrepreneurial landscape (ie, stable economy, strong and flexible legal framework, and competitive fiscal climate). Typically, new start-up companies are incorporated as either a sole proprietorship (eenmanszaak) or a private limited liability company (besloten vennootschap or BV). Dutch corporate law allows entrepreneurs to incorporate a Dutch BV with a minimum contribution of EUR0.01. The incorporation of a new Dutch BV can be completed within a week. In contrast to the private limited liability company, the incorporation of a public limited liability company (naamloze vennootschap) in the Netherlands requires an initial capital contribution of at least EUR45,000. This legal entity is also subject to a less flexible legal framework than the BV and is not often used for start-ups.

Entrepreneurs in the Netherlands are predominantly advised to choose a private limited liability company (besloten vennootschap) for the initial incorporation due to its flexible regime and the limited liability for the shareholders (attractive for venture investors), and because nearly no initial capital contribution is required (see 2.1 Establishing a New Company). In some instances, different types of entities are preferred, which can be based on tax and other considerations.

Early-stage financing, or seed investment, is usually provided by entrepreneurs themselves, friends and family, venture capitalists, angel investors or banks, or through crowdfunding, family offices or governments-sponsored funds. There are many opportunities available for government funding or tax benefits, such as the Seed Business Angel Fund (specifically for tech and creative start-ups), proof-of-concept funding (vroegefasefinanciering or VFF), R&D tax credit (de Wet bevordering speur-en ontwikkelingswerk or WBSO) and the innovation credit. The method of documentation varies by type of investor and financing, and can for example be in the form of loan agreements or subscription agreements.

Dutch start-ups typically attract external funding from several sources: the three Fs (friends, family and fools), angel investors, family offices, (corporate) venture capital funds and government funds. While venture capital is readily available to Dutch start-ups, especially in the early stages, this is decreasing as companies become more mature and their funding needs increase. Both domestic and international venture capital investors provide funding to Dutch start-ups, where domestic investors pick up a relatively larger size of funding in early stages, and international investors in later stages. The Dutch government aims to create a favourable business climate for start-ups and has introduced various measures and initiatives to increase access to venture capital. Noteworthy recent examples include Techleap, the Seed Capital Scheme, Invest NL, the Dutch Growth Fund, and the Regional Development Agencies.

Unlike in the US (NVCA) or the UK (BVCA), there is no generally acknowledged Dutch venture capital association that prepares comprehensive industry templates for venture capital documentation. The Dutch foundation Capital Waters, a private initiative, has developed several templates with the help of multiple investors, entrepreneurs, and experts in the venture capital field.

Most Dutch start-ups are structured as a Dutch private limited liability company (besloten vennootschap or BV) (see 2.1 Establishing a New Company and 2.2 Type of Entity). Dutch start-ups typically remain as BVs as they grow into more mature companies. Only if a start-up seeks further financing through an IPO would it convert into a Dutch limited liability company (naamloze vennootschap or NV), as this is the most appropriate legal form for Dutch listed companies.

Dutch law provides a legal basis for cross-border conversions of a Dutch BV into the legal entity form of another EU member state. This is not a typical move for a start-up but can be an option for companies that are looking to relocate to a different EU member state.

When investors in a start-up in the Netherlands are looking for a liquidity event, whether they are more likely to take a company public by listing on a securities exchange or to run a sale process depends, amongst other things, on market sentiment. In the past, several tech companies have gone public on Euronext Amsterdam. However, in the last couple of years, the number of IPOs in the Netherlands has been limited, and most investors looking for a liquidity event ran a sale process.

Generally, if a Dutch company pursues a listing, Euronext Amsterdam is considered since it is one of the major stock exchanges having international exposure, and because some well-known tech companies (eg, Adyen) are listed on Euronext Amsterdam.

If a Dutch company chooses to list on a foreign exchange, this does not in principle affect the feasibility of a future sale. Furthermore, on a foreign stock exchange, similar corporate governance rules generally apply to the company, and Dutch statutory minority squeeze-out rules also apply equally.

Typically, the sale of a privately held venture capital-backed tech company is conducted through bilateral negotiation, often on an exclusive basis with a selected candidate, rather than through an auction process. Specific strategic buyers who possess the necessary expertise and can unlock future value are preferred over a range of bidders in an auction. Bilateral negotiations facilitate speed and efficiency and allow for more bespoke transaction structures compared to an auction-based disposal.

The sale of privately held technology companies that have a number of venture capital investors is typically structured as a sale of shares in the top-holding company. The current trend is to sell a controlling interest, while the venture capital funds stay on as minority investors. However, full acquisitions are also not uncommon, and the choice between a full and partial exit often depends on (i) the strategic goals of the buyer, (ii) the preference of the existing shareholders and (iii) the macroeconomic environment at large. Venture capital investors may prefer structures that allow them to stay on as shareholders if they see significant upside potential. Continued access to the venture capital’s networks and expertise can also play a role.

Consideration for transactions involving privately held venture capital-financed companies is often a mix of cash and stock. The stock can be equity in the capital of an acquisition entity (in case of a private equity buyer) or in the parent (in case of a strategic buyer). That being said, this very much depends on the deal dynamics and strategic plans of the buyer. We also see (often) full cash and (less often) full stock deals.

Founders and venture capital investors are typically expected to provide warranties, a tax indemnity and sometimes specific indemnities, depending on the due diligence findings and the leverage position between parties. As in many industries, a continuous increase in the use of warranty and indemnity (W&I) policies for venture capital-backed transactions can be seen in the Netherlands.

Sellers usually provide a customary set of warranties (categorised as business, fundamental and tax warranties) and a tax indemnity, in some cases insured via a W&I insurance policy with no or limited residual liability for the respective seller. A distinction is often made between founders and venture capital investors in respect of the residual liability. It is fairly uncommon in the Dutch market today for the management team to provide warranties separately, regardless of whether this occurs via a separate management warranty deed, which can also be covered by a W&I policy.

Spin-offs are customary in the Netherlands, especially within the technology sector. They are a strategic tool used by both large corporations and tech start-ups to enhance focus, drive innovation and unlock value. The key drivers for considering a spin-off in the Dutch tech industry include the following.

• Focus on core competencies: Companies often spin off non-core or underperforming divisions to concentrate on their primary business. This is particularly common in tech firms, where innovation and specialisation are crucial for staying competitive. Spin-offs allow management to focus on the core technologies or services that drive their competitive edge.
• Unlocking value for shareholders: Spin-offs can help unlock shareholder value by separating high-growth potential assets from mature or slower-growing parts of the business. This restructuring makes the spun-off entity more attractive to investors, particularly in sectors like software, cloud services or AI, where growth prospects are strong.
• Fostering innovation and agility: In fast-paced tech environments, spin-offs enable the creation of smaller, more agile companies that can innovate without the bureaucratic constraints of a larger parent organisation. This is often driven by a need to develop emerging technologies, such as fintech, cybersecurity or machine learning, in a more agile way.
• Regulatory or market pressure: Increasing regulatory scrutiny, especially concerning anti-competitive behaviour by big tech, can also be a driver. Companies might spin off divisions to comply with regulations, such as in cases where there is pressure from European regulators to break up monopolistic structures.
• Private equity and M&A strategies: Spin-offs are also often used as part of larger M&A strategies, particularly when private equity is involved. A spin-off can prepare a business unit for eventual sale or public listing, attracting investment in a more focused entity that operates independently from the parent.

Spin-offs in the Netherlands can be structured as tax-free transactions at both the corporate level and the shareholders’ level.

For a tax-free spin-off at the corporate level in the form of a demerger, the following key requirements need to be met:

• the demerging and acquiring entity are tax residents of the Netherlands, the EU or the European Economic Area (EEA);
• the spin-off is not predominantly aimed at avoiding or deferring taxation (ie, there must be sound business reasons) – unless counterevidence is provided, sound business reasons are deemed not to be present if shares in the demerging or acquiring entity are transferred to a third party within three years after the demerger;
• the demerging and acquiring entity must be subject to the same tax regime; and
• the future levy of Dutch corporate income tax must be assured after the spin-off.

However, if not all of these further conditions are met, the spin-off can still occur tax-free but a request should be submitted to the Dutch tax authorities prior to the spin-off. In that case, the Dutch tax authorities could allow the tax-free spin-off under certain restrictions.

A spin-off in the form of an asset transfer against the issuance of shares by the acquiring entity can also occur tax-free under similar conditions. Regarding relevant differences for a spin-off in the form of a demerger, for a tax-free asset transfer, the acquiring entity can under certain conditions also be a non-EU/non-EEA tax resident, and the transferred assets should constitute (part of) a business.

For a tax-free spin-off at the shareholder level in the form of a demerger, it is required that:

• the demerging and acquiring entity are tax residents of the Netherlands, the EU or the EEA; and
• the spin-off is not predominantly aimed at avoiding or deferring taxation – ie, there must be sound business reasons.

A spin-off in the form of an asset transfer should not trigger tax at the shareholder level.

A spin-off followed by a business combination is possible in the Netherlands. Key requirements include:

• legal compliance – the spin-off must follow Dutch Civil Code and, if the company is listed, securities rules apply;
• corporate approvals – shareholder and board approvals are needed for both the spin-off and the subsequent merger or acquisition;
• tax considerations – Dutch tax law allows for tax-neutral spin-offs if structured properly, which is crucial when a business combination follows;
• regulatory approvals – large transactions may require clearance from the Dutch competition authority (the Netherlands Authority for Consumers and Markets (Autoriteit Consument & Markten or ACM)) and/or foreign direct investment (FDI) approvals; and
• timing – the sequence should be carefully planned to avoid legal and tax complications.

The timing for a spin-off depends on its structure. If the spin-off is structured as a statutory demerger, the typical timing is at least two months, taking into account preparation time, a statutory waiting period of one month and a limited period for execution. This assumes there is no objection from creditors at the end of the waiting period. If the spin-off is structured as a distribution of subsidiary shares (which is often the case if a business is spun off to existing shareholders), this can be done relatively quickly from a corporate law standpoint (in a matter of weeks). However, if such a spin-off involves the distribution of the subsidiary of a listed company and the subsidiary shares are admitted to listing and trading on a stock exchange, this adds a significant period to the timetable, given the required regulatory approval process.

Parties would need to obtain a ruling from a tax authority prior to completing a spin-off if not all conditions for a tax-free spin-off at the corporate level are met. In such case, a request should be submitted to the Dutch tax authorities prior to the spin-off. Typically, the Dutch tax authorities issue a decision regarding such request within two months. Furthermore, at the corporate and/or shareholder level, a request for certainty on whether the spin-off is not predominantly aimed at avoiding or deferring taxation may be submitted to the Dutch tax authorities prior to the spin-off. Typically, the Dutch tax authorities issue a decision in response to such request within two months.

It is not uncommon for a bidder to acquire shares in the target prior to launching a public offer or during the offer period. This so-called stakebuilding is subject to disclosure requirements. Anyone who acquires or disposes of shares or voting rights in a listed company, as a result of which the percentage of capital or votes held reaches, exceeds or falls below certain thresholds, must report this to the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten or AFM) without delay. The same applies to the acquisition or disposal of financial instruments that represent a short position with respect to shares. The following thresholds trigger a notification obligation: 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95%. The notifications are published in a public register on the AFM website.

There is no general obligation for shareholders to disclose the purpose of their acquisition or their intention regarding control of the company. The Dutch Corporate Governance Code includes rules that require institutional investors to disclose their engagement policy and the implementation thereof on their website. If someone creates the impression that it is preparing a public offer, the target can request the AFM to force the alleged bidder to publicly state its intentions. This is the so-called put up or shut up rule. In that case, the alleged bidder must issue a press release in which it announces a public offer or that it has no intention of making a public offer. If the press release states that the party in question has no intention of making an offer, they (and the persons with whom they are acting in concert) are prohibited from announcing or making a public offer for a period of six months after that press release. If a bidder launches a public offer, the offer memorandum should include information on the intentions of the bidder regarding the activities, locations, employees, management and governance of the target after declaring the offer unconditional.

There is a mandatory offer threshold in the Netherlands for bidders exercising, directly or indirectly, at least 30% of the voting rights in the general meeting of a Dutch company listed on a regulated market (alone or together with others with whom the bidder is acting in concert). A bidder meeting these requirements will be obliged to make a mandatory offer. “Acting in concert” is defined as persons co-operating under an (oral or written) agreement with the aim of acquiring control in the target company.

Unfortunately, guidance on when persons are acting in concert is limited. Contrary to other EU jurisdictions where similar mandatory offer rules apply, there is no possibility to obtain guidance from any regulatory authority, since in the Netherlands a Dutch court will ensure compliance with the mandatory offer rules and not the AFM.

A mandatory offer should be made at a fair price that will, in principle, be equal to the highest price paid by the bidder for shares in the target in the one-year period preceding the announcement of the mandatory offer.

For the acquisition of a public company in the Netherlands, most transactions are structured as a public offer or a takeover bid. The bidder is required to make a public announcement about its intention to acquire the target company according to Dutch corporate law. In most of these transactions, the purchase price is entirely paid in cash. Payment in either securities or a mixed form of cash and securities is also possible.

Less commonly, a takeover may take the form of a legal merger whereby either both companies merge into a new entity or one company absorbs the other.

In most Dutch public company acquisitions in the technology industry, only cash is used as consideration. However, it is also possible to offer securities or a combination of cash and securities.

Only in case of a mandatory offer do (minimum) price rules apply. A mandatory offer should be made at a fair price that will, in principle, be equal to the highest price paid by the bidder for shares in the target in the one-year period preceding the announcement of the mandatory offer. In the context of private tech M&A transactions with high valuation uncertainty, the authors frequently encounter contingent value rights such as earn-out mechanisms granted to venture capital investors to bridge value gaps between the parties. These types of structures are not seen in the context of public M&A.

A public offer is usually subject to “commencement conditions” – ie, conditions that must be satisfied (or waived) for the bidder to launch the offer, and to “offer conditions”, namely conditions that must be satisfied (or waived) in order to declare the offer unconditional.

Common commencement conditions include:

• no breach of the (material provisions of the) merger protocol;
• absence of a material adverse change;
• no change in the board’s recommendation;
• compliance with employee consultation procedures;
• no legal prohibition of the public offer; and/or
• no suspension of trading of the target company’s shares.

Similar conditions typically apply as offer conditions. In addition, the following conditions generally apply:

• all regulatory approvals have been obtained; and
• a certain minimum acceptance threshold has been met.

Finally, the adoption of certain general meeting resolutions (eg, the dismissal or appointment of directors) that will become effective upon settlement of the offer is generally included as an offer condition. In contrast to a voluntary public offer, the completion of a mandatory offer may not be made subject to any conditions.

In the context of a takeover offer, although not statutorily mandated, it is customary in the Netherlands to outline the terms and conditions of a tender offer in a merger protocol. In a merger protocol, the target company’s boards commit to endorsing and backing the offer, as well as co-operating with it, while the bidder consents to launching the public offer. Furthermore, the merger protocol often includes provisions relating to:

• conditions for initiating and completing the offer;
• interim operating covenants;
• regulatory approvals;
• break fees;
• “no-shop” provisions; and
• non-financial covenants.

The representations and warranties given by public companies are typically more limited in scope compared to those given by private companies. Publicly traded companies must adhere to various disclosure requirements, making a lot of information already publicly accessible. Reference is often made to the public filings as the basis for the representations and warranties.

For tender offers, there is typically a threshold for shares that are tendered under the offer of at least 95%. This threshold of 95% is a typical minimum acceptance condition for tender offers, because a bidder can subsequently initiate statutory squeeze-out proceedings to acquire the remaining minority shares. Furthermore, it is market practice to agree that the 95% threshold will be lowered (eg, to 80%) if the general meeting of the target has passed resolutions to initiate alternative squeeze-out measures. This allows the bidder to acquire full control of the business of the target company after settlement of the offer, even if they acquired less than 95% of the target’s shares.

Under Dutch law, a shareholder (eg, the bidder following a successful tender offer) holding 95% of the target’s issued share capital has a statutory squeeze-out mechanism at their disposal. Such shareholder can request the Enterprise Chamber to force the remaining shareholders that have not tendered following a successful tender offer to sell their shares to the majority shareholder. Similarly, a minority shareholder that is being squeezed out has the right to request a sell-out from the majority shareholder (assuming such majority shareholder holds 95% or more of the shares) – ie, to require the majority shareholder to purchase their shares.

It is market practice for the bidder and the target to agree that if the bidder fails to reach the acceptance level of 95%, but exceeds a certain lower acceptance level (typically 80%), the target’s board will co-operate with so-called alternative squeeze-out measures (subject to shareholder approval). These alternative possibilities allow for a squeeze-out of minority shareholders if a bidder, following a successful tender offer, holds less than 95% of the target’s issued share capital.

Transaction structures that are regularly seen include:

• a triangular merger of the target into a subsidiary of the bidder, with the subsequent liquidation of the entity in which the non-tendering shareholders have received securities;
• the sale and transfer of all assets and liabilities of the target to a subsidiary of the bidder with subsequent liquidation of the target; and
• a combination of an asset sale and a (triangular) merger.

To mitigate any concerns over the efficacy of alternative squeeze-out measures, and to enhance deal certainty, there is a consistent trend in public takeovers in the Netherlands to “prewire” any alternative squeeze-out measures. “Pre-wired” in such case means that the decision to implement an alternative squeeze-out measure is put to a vote at the general meeting of the target prior to closing the offer (subject to the bidder having acquired less than 95%, but at least the alternative percentage, of the target company’s issued share capital following completion of the public offer).

A public offer cannot be conditional on obtaining the required financing. Ultimately, by the time the request for approval of the offer memorandum is filed with the AFM, the bidder must have procured and demonstrated that it either (i) has the necessary financial resources to complete the offer by paying the consideration in cash or (ii) has taken every reasonable measure to provide any other kind of consideration. In addition, the offeror must make a public announcement as soon as it has secured certainty of funds.

In private M&A transactions, obtaining the financing required for the transaction is frequently included as a condition precedent.

A target company’s management and supervisory directors are required to act in the best interests of the company. Any deal protection measures that a target company can grant should, therefore, be proportional and reasonable. Deal protection measures such as arrangements for break-up fees, matching rights, no-shop provisions, exclusivity and information rights can be granted by a target company; however, such deal protection measures are to be considered by the target company in relation to all other circumstances to determine if the total package of deal protection measures is permissible.

The target company typically requires a “fiduciary out” in addition to such measures, and the measures may not entirely exclude the possibility of a target company engaging with a third-party bidder if that third party has a superior offer. All circumstances should be considered to determine if the total package of deal protection measures is permissible. A break-up fee of around 1% of the target’s equity value in a Dutch public offer is generally accepted; however, in certain cases, higher break fees may be agreed upon.

If a bidder does not intend to acquire 100% ownership of a target, it may strengthen its governance rights by, for example, entering into a shareholders’ or voting agreement with another major shareholder or concluding a relationship agreement with the target company. Such agreements typically include provisions regarding governance rights and may include a nomination right for one or more members of the supervisory board. They may also include share transfer restrictions or orderly market arrangements.

An agreement between shareholders may trigger a mandatory offer if the shareholders are deemed to act in concert and can jointly exercise at least 30% of the voting rights at the general meeting of a Dutch-listed company (see 6.2 Mandatory Offer Threshold).

It is common for a bidder to approach, and subsequently to enter into irrevocable commitments with, one or more principal shareholders that hold a substantial interest in the target. Irrevocable undertakings generally require the shareholder to offer its shares in the offer, and to vote in favour of certain resolutions that will be put on the agenda during the general meeting of the target company prior to the end of the tender period. Irrevocable undertakings usually provide deal certainty.

However, a shareholder will typically only agree to commit to an irrevocable undertaking if it may terminate the irrevocable commitment in the event of a superior competing offer.

There are no statutory rules on the timing of the signing of irrevocable commitments. However, such commitments are generally negotiated concurrently with the (final) negotiations on the merger protocol and signed (just) prior to the initial public announcement.

To prevent the qualification of entering an irrevocable commitment as acting in concert, which would trigger the obligation to launch a mandatory offer, the Dutch offer rules provide for a safe harbour provision (subject to certain conditions).

Finally, the Market Abuse Regulation (MAR) provides for rules on market sounding, which include approaching shareholders in the context of a public offer.

In a public M&A transaction, the offer rules mandate a public announcement once the bidder and the target company have reached (conditional) agreement on the offer. After this initial announcement, it generally takes two to three months to obtain approval from the AFM for the offer memorandum and to formally launch the offer. The offer period must be eight to ten weeks, with an optional extension of two to ten weeks. Any further extensions require AFM approval. After the offer period closes, a post-offer tender period of up to two weeks is typically announced by the bidder. The timeline for the announcement of a public offer does not change if there is a competing bid, except that the initial bidder can extend the acceptance period for its offer until the end of the acceptance period for the competing offer.

Regulatory/antitrust approval(s) may be required, depending on the sector the target company is operating in. An example of a regulated sector in which many tech companies operate is finance. If the mandatory regulatory/antitrust approval(s) are not obtained prior to the expiry of the offer period, the bidder can extend the offer period once by two to ten weeks. If the necessary regulatory/antitrust approval(s) are not secured within the extended timeframe, the bidder can request an exemption from the AFM until the approvals are received.

Starting a new company in certain sectors of the technology industry in the Netherlands is subject to specific regulations. The level of regulatory scrutiny and the time to obtain necessary permits depend on the sector and business activities.

Key sectors and regulatory bodies include the following.

• Fintech: Companies involved in financial technologies, including digital payment systems or blockchain services, must comply with financial regulations, supervised by the Dutch Central Bank (De Nederlandsche Bank or DNB) and the AFM. These bodies oversee licensing for payment services, cryptocurrency exchanges and other financial activities. Licensing can take anywhere from three to six months depending on the complexity and completeness of the application.
• Telecommunications and IT infrastructure: Businesses in telecommunications or operating critical IT infrastructure must work with the ACM. This includes obtaining licences for operating network services, data centres and internet services. The timeline varies but typically ranges between six and nine months for larger telecom operations.
• Healthcare technology: Healthtech start-ups that process medical data or offer digital health services must seek approval from the Dutch Health and Youth Care Inspectorate (Inspectie Gezondheidszorg en Jeugd or IGJ). These companies must demonstrate compliance with data protection and healthcare standards, which could take several months.
• Wet Vifo: A significant legal development in the Netherlands is the introduction of the FDI screening regime on 1 June 2023, implemented via the so-called Wet Vifo (the “Vifo Act”). The Vifo Act is designed to protect national security by screening certain investments and M&A. It focuses on transactions involving vital providers and companies active in sensitive technology sectors. The Vifo Act can have several significant implications for tech company acquisitions in the Netherlands: acquisitions involving tech companies (especially when they are dealing with sensitive technologies) will be subject to rigorous screening, which can lead to delays in the acquisition timeline. If the authorities determine that the acquisition poses a risk to national security, they have the power to block the transaction.

The primary securities market regulator overseeing M&A transactions in the Netherlands is the AFM. The AFM is responsible for supervising the functioning of the financial markets, including with respect to public M&A transactions, and for ensuring compliance with relevant regulations pertaining to public offers within the Netherlands.

The Netherlands has an open economy and welcomes foreign investments and investors. However, for some industries in vital sectors in the Netherlands, there may be restrictions in terms of acquisitions; alternatively, a notification to or authorisation from a regulator may be required (see 7.4 National Security Review/Export Control).

In the Netherlands, foreign investment is generally encouraged due to the country’s open economy. Foreign investors are typically welcomed across various sectors. However, certain M&A transactions involving foreign investors may be subject to FDI screening or national security reviews, depending on the nature of the transaction and the industry involved.

Sectors that are considered sensitive or critical (“vital” sectors), such as telecommunications, defence, energy and technology, may have specific restrictions on foreign ownership or require prior approval from the competent authority – ie, the Investment Screening Bureau (Bureau Toetsing Investeringen or BTI). In such cases, a notification to or authorisation from the relevant regulatory authorities may be mandatory. In an FDI filing, a standstill obligation applies under which the parties are prohibited from implementing the proposed transaction before the required clearance is obtained from the BTI. These measures are in place to protect national security and safeguard critical infrastructure from potential foreign influence.

There is no general national security review of acquisitions in the Netherlands. However, since the Dutch National Security Investment Act (Wet veiligheidstoets investeringen, fusies en overnames or the “NSI Act”) entered into force on 1 June 2023, there are certain considerations for investors/buyers who are willing to invest in or acquire a target company in the Netherlands that is a (i) vital provider, (ii) manager of a corporate campus or (iii) sensitive technology company. A company that operates, manages or makes available a service whose continuity is vital to Dutch society is considered a vital provider. Examples include key financial market infrastructure providers like significant banks, payment services providers, trading platforms, major transport hubs (Schiphol Airport and the Port of Rotterdam), heat network or gas storage operators and extractable energy or nuclear power companies.

The notification requirement resulting from the NSI Act applies irrespective of the nationality of the acquirer. The notification obligation applies to both the acquirer and the target company. The acquirer is exempted from the obligation to report if the investor cannot know that the investment is subject to a notification obligation due to a secrecy obligation of the target company.

In addition to the NSI Act, the main laws currently in force in the Netherlands containing foreign investment review-related provisions are:

• the Dutch Electricity Act 1998;
• the Dutch Gas Act;
• the Dutch Financial Supervisory Act;
• the Dutch Gambling Act;
• the Dutch Healthcare Market Regulation Act;
• the Dutch Mining Act; and
• the Dutch Telecommunications Act, as amended by the Dutch Act on undesired control in telecommunications.

In the Netherlands, the EU restrictions regarding the export of so-called dual-use goods and services apply. As a result, the supply of certain TMT goods, services and know-how to non-EU destinations is restricted, or is subject to licences and other export compliance obligations. In cases concerning exports to destinations in connection with which the EU has implemented economic sanctions – eg, Russia and Belarus – export restrictions apply to a much larger range of TMT products and services. In addition to compliance with EU regulations, in many instances it is a requirement to also consider export-related restrictions or compliance obligations from other jurisdictions when exporting from the Netherlands. Businesses are expected to do careful due diligence and prevent circumvention of export restrictions in the context of TMT supplies. Compliance is monitored by, among others, customs authorities and the Dutch Ministry of Foreign Affairs, in close co-operation with the EU and the authorities in other EU member states.

In the Netherlands, business combinations such as mergers, acquisitions or joint ventures that are not subject to EU merger control may be required to notify the ACM under Dutch competition law. According to the Dutch Competition Act, changes of control fall within the scope of Dutch merger control regulations, which implies that the acquisition of a minority stake is not notifiable unless control is granted, for instance through veto rights or similar powers over strategic decisions.

A mandatory pre-closing merger filing in the Netherlands is required if the following thresholds were met in the last calendar year prior to the transaction: (i) the combined worldwide turnover of the companies concerned was EUR150 million or more, and (ii) the turnover in the Netherlands of each of at least two companies concerned was EUR30 million or more. Certain sectors may have different and sector-specific turnover thresholds. Under the Dutch merger control regime, a standstill obligation applies, meaning that a proposed transaction cannot be consummated until after approval has been obtained from the ACM.

The ACM decides whether a proposed transaction would significantly impede competition in the Dutch market, or a substantial part thereof, particularly if this would result in the creation or strengthening of a dominant market position.

If a transaction is structured as a share deal, the acquirer obtains the target “as is”, including all employees and connected contracts and collective regulations, as well as any existing labour-related obligations. In contrast, if the transaction is structured as an asset deal and, as a result, a “business” is being transferred on a going concern basis, all employees predominantly working for such business automatically transfer to the acquirer (the new owner) along with their applicable employment terms and conditions. This automatic transfer is governed by the Transfer of Undertakings Protection of Employment (Overgang van onderneming or TUPE) regulations or the EU Acquired Rights Directive (Richtlijn Overdracht van Ondernemingen or ARD). In such scenario, the acquirer is required to honour all existing employment terms and conditions at the time of the transfer, with specific exceptions possibly applying to pension arrangements depending on the relevant facts and circumstances.

In the event of a change of control or a business transfer involving a company with a works council, the works council must be consulted and has a right of prior advice. While the works council’s advice is not legally binding on the company’s board, the company must await the works council’s advice before proceeding with the proposed transaction. If the board chooses to disregard the works council’s opinion, it must justify its decision and may face delays, as the works council has the right to escalate the matter to the Dutch Enterprise Court (Ondernemingskamer). The Dutch Enterprise Court assesses whether the board’s decision is unreasonable.

For (group) entities, where either the buyer or seller has 50 or more employees in the Netherlands, there is an obligation to notify the Dutch Social Economic Council (Sociaal-Economische Raad or SER) and any relevant trade unions prior to completion of the proposed transaction. Trade unions may also request consultations regarding the transaction’s social and economic impact on employees.

For transactions primarily concerning the Dutch market, where the entity or group entity employs 50 or more individuals in the Netherlands (either on the seller’s or acquirer’s side), there is a requirement to notify, in a timely manner, SER and relevant trade unions (if any) ahead of the deal’s closure. The trade unions reserve the right to request consultation regarding the social and economic implications of the transaction.

The Netherlands does not have foreign exchange controls. M&A transactions involving financial institutions are subject to the supervision of sector-specific regulators, such as the European Central Bank (for banks) or the DNB (for other financial institutions, such as insurance companies).

The first court decision involving the Vifo Act (described in the foregoing), issued by the district court of Rotterdam on 25 April 2024 (ECLI:NL:RBROT:2024:3747), pertains to the acquisition of a former Philips subsidiary. According to the court, there was no notification obligation since there was no acquisition activity within the meaning of the Vifo Act (the “acquirer” already had control over the company prior to the transaction).

Another significant legal development in the Netherlands related to technology M&A in recent years is the 2023 ruling by the ACM regarding the acquisition of Talpa Network by the RTL Group. The ACM blocked the acquisition on antitrust grounds, citing concerns about potential harm to competition for television advertisements and for the transmission of the channels via telecommunications companies. Telecom providers such as KPN and Vodafone-Ziggo are including commercial TV channels in their channel offering. After the acquisition, they would not be able to ignore RTL/Talpa, which would also be able to charge higher prices to consumers for a television subscription.

This decision was significant as it reflected an increasingly stringent approach by Dutch regulators towards (tech) mergers, particularly in markets where consumer choice and innovation could be adversely affected. The ruling not only set a precedent for future mergers in the technology and telecommunications sectors but also highlighted the growing importance of antitrust considerations in M&A transactions.

There are no hard and fast rules on what information a public company is allowed to provide to bidders in the Netherlands. Generally, any information that is relevant for investors is already disclosed. Due diligence typically focuses on the verification of public information and testing the strategic plans (including potential synergies) of the bidder based on a detailed assessment of available information. Generally, bidders try to avoid obtaining inside information (ie, non-public information that is share price sensitive) from the public company. A sales process of a public company with multiple bidders is generally set up informally based on public information, after which one bidder is granted exclusivity and allowed to perform due diligence.

The level of technology due diligence that a board of directors may allow depends on the strategic importance of the technology assets and intellectual property involved. The board has a duty to safeguard the company’s critical assets while balancing the bidders’ need to conduct thorough due diligence. For companies in sectors like software, AI or cybersecurity, the board may restrict access to sensitive intellectual property until later stages of the process, potentially after signing non-disclosure agreements or letters of intent. This ensures that proprietary technology is not prematurely exposed.

The management board has a fiduciary duty to act in the best interests of the company, its business and stakeholders (including its shareholders). This includes determining what level of due diligence is reasonable and appropriate while ensuring that the process does not compromise the company’s competitive position should the M&A process be aborted. In some cases, the board may limit or structure the due diligence process to protect sensitive data (eg, source code or trade secrets) while still providing enough information for bidders to make informed decisions.

Data privacy restrictions in the Netherlands, primarily governed by the General Data Protection Regulation (GDPR), can limit the scope of due diligence in technology company transactions. These restrictions apply to the handling, sharing and transferring of personal data during the due diligence process.

Important data privacy restrictions impacting due diligence include the following.

• GDPR compliance – the GDPR, which applies across the EU and thus in the Netherlands, imposes strict requirements on how personal data is handled. Companies must ensure that personal data shared during due diligence is:
1. minimised – only data necessary for the assessment should be shared (data minimisation principle);
2. anonymised or pseudonymised – where possible, personal data should be anonymised or pseudonymised to protect the privacy of individuals, especially with respect to sensitive information like employee, customer or user data; and
3. lawful – there must be a legal basis for sharing personal data, such as in the legitimate interests of completing the transaction, but this must be balanced against the privacy rights of data subjects.
• Due diligence limitations – in the context of technology M&A, the following restrictions often apply:
1. employee data – sharing identifiable employee information (eg, payroll or personal details) is restricted unless necessary for assessing liabilities or integration risks;
2. customer data – access to customer databases, especially if they include sensitive information, is limited and often requires anonymisation or consent before sharing; and
3. intellectual property or source code – if source code or technology assets contain embedded personal data (eg, user data in AI training models), additional precautions may be required before disclosing these assets.
• Data processing agreements (DPAs) – if personal data must be transferred during due diligence, a DPA between the selling and buying parties may be necessary to outline the terms of processing and ensure GDPR compliance. This contract would include provisions on security measures, data protection obligations and how the data can be used.
• Cross-border data transfers – if the buyer is outside the EU, the GDPR restricts the transfer of personal data to countries that do not provide an adequate level of data protection. In such cases, specific safeguards like standard contractual clauses (SCCs) must be in place to legally transfer data during the due diligence process.

In case of a public offer, the offer memorandum must be filed for approval with the AFM within 12 weeks following the initial announcement. The review and approval process generally takes three to four weeks. Within six business days after obtaining the AFM’s approval for the offer memorandum, the bidder must either launch the offer or publicly renounce its decision to do so.

The offer is launched by making the offer memorandum publicly available, typically by publishing the offer memorandum on the website of the offeror and/or the target. The tender period may not commence earlier than the first business day following the day that the offer is launched and no later than the ninth business day after the date on which the AFM has given its approval for the offer memorandum.

If a bidder offers securities as consideration, they will generally be required to make an approved prospectus available. This obligation also applies to the admission of such securities to trading on a regulated market, such as Euronext Amsterdam. The Prospectus Regulation provides for certain exemptions with respect to the prospectus obligation. For example, the obligation to publish a prospectus does not apply to securities offered in connection with a takeover by means of an exchange offer, nor to securities offered or allotted in connection with a merger or for the admission to trading of such shares on a regulated market, provided that a document is made publicly available containing information describing the transaction and its impact on the issuer. Any such document will include information that is similar to the information included in an approved prospectus, but it would not have to be approved by the AFM as a prospectus. It is not necessary for the buyer’s shares to be listed on a specified exchange in the home market or other identified markets.

In case of a public offer, the bidder will have to include in the offer memorandum a comparative overview of the target’s consolidated balance sheet, income statement and cash flow statement covering the last three financial years, as well as the target’s latest published annual accounts including the explanatory notes thereto. The auditor will need to issue a report on these comparative financials. If the target publishes semi-annual accounts after the latest annual accounts, these will also have to be included in the offer memorandum, including a review statement.

In case of an exchange offer, the offer memorandum will also have to contain information describing the transaction and its impact on the issuer (ie, the bidder). Consequently, in line with the prospectus rules, proforma financial information about the bidder and the target will in principle have to be included.

There is no statutory requirement to disclose full transaction agreements, and it is not market practice to do so.

The offer memorandum will contain relevant information for shareholders regarding the public offer, including a summary of the transaction agreements. The target company will also publish a position statement, which includes information about the views of the target company on the consideration offered by the bidder and the considerations and projections used to determine the offer price (or exchange ratio), including the quantitative basis on which the target has taken its position vis-à-vis the consideration offered and the consequences of the public offer on employees, employment conditions and the target company’s place(s) of business. It is common practice for the target company’s boards to obtain one or more fairness opinions. If these are obtained, it is required that they be disclosed as an attachment to the position statement.

The management board is responsible for the management of the company and its business, under the supervision of the supervisory board. The management board’s responsibilities include, inter alia, the day-to-day management of the company’s operations. The management board may perform all acts necessary or useful for achieving the company’s objectives, with the exception of those acts that are prohibited or expressly attributed to the general meeting or supervisory board by law or by the company’s articles of association.

In performing their duties, the management board and supervisory board are required to be guided by the interests of the company and its business. Based on case law, this is understood to mean that the boards must promote the sustainable success of the business of the company. While doing so, they should take into account the interests of the company’s stakeholders (which generally includes various parties, such as shareholders, creditors, employees and customers).

The fiduciary duties of the management board and supervisory board do not change if the company is involved in a contemplated business combination.

In Dutch takeover situations, it is common for the management board to work closely with the supervisory board. To this end, it is not uncommon for the target company to establish a special committee to intensively supervise the transaction process and the related decision-making. Such a committee can be composed of supervisory directors only, or a mix of supervisory and management directors. Establishing a special committee can ensure a proper balancing of interests and a proper decision-making process, and furthermore prevent (the appearance of) conflicts of interest within the boards as much as possible. A special committee closely monitors the transaction process, provides the boards with solicited and unsolicited advice and prepares the decision-making phase.

The board is often actively involved in negotiations. In the Netherlands, it is generally permissible to use defensive measures (eg, a foundation that has a call option on preference shares) to block or impede an unsolicited takeover offer. Most of the time, however, such defensive measures are not exercised by the target company’s directors but by an independent foundation. It is not common practice to have shareholder litigation challenging the board’s decision to recommend an M&A transaction, although shareholder activism has occurred in the past.

In a business combination, directors generally obtain outside advice from lawyers, financial advisers (eg, investment bankers) and/or other consultants and advisers. In addition, in case of a public offer, the boards of the target company may also obtain one or more fairness opinions regarding the financial reasonableness of the proposed transaction.