A Dutch acquisition usually takes one of two forms, a share deal or an asset deal, and that choice determines almost everything that follows. A legal merger, in which one company is absorbed by another by operation of law, is a third option, but in practice it is used mainly within groups.
In a share deal the buyer acquires the shares and therefore the company as it stands, including every liability it carries, known or not. In an asset deal the buyer acquires selected assets and liabilities. That is cleaner, but each contract must be transferred with the cooperation of the counterparty, and employees transfer automatically to the buyer if the transaction amounts to a transfer of an undertaking.
The legal framework has several fixed points. A transfer of shares in a Dutch private limited company (besloten vennootschap, BV) must be effected by a notarial deed executed by a Dutch civil-law notary. Where the transaction affects the business, the works council (ondernemingsraad) has a right to give advice before the decision is taken, and that right has teeth: a decision taken in disregard of it can be challenged before the Enterprise Chamber (Ondernemingskamer). The Merger Code of the Social and Economic Council (SER) requires trade unions to be informed in certain cases. Clearance from the Authority for Consumers and Markets (ACM) is required where the parties’ turnover exceeds the statutory thresholds, and separate screening applies to investments in vital providers and sensitive technology under the investment screening legislation in force since 2023.
Between signing and completion, and after completion, risks are allocated mainly by the contract, through warranties and indemnities. The statutory protection for a buyer of shares is limited and a buyer is expected to investigate, so what is not warranted is often hard to recover. Below we work through the process from letter of intent to completion, what due diligence should cover, how the price mechanism and the warranties fit together, and which approvals to secure early.
What are mergers and acquisitions?
In an acquisition, one party buys another company, through its shares or its assets. In a merger, two businesses combine; under Dutch law a legal merger (juridische fusie) means that one company ceases to exist and its assets and liabilities pass to the other by operation of law.
How do the different transaction structures work?
The term “merger” is used loosely in practice. The main structures under Dutch law are:
- Share deal (aandelentransactie): the buyer acquires the shares in the target company. The company itself remains the same legal entity, with all its contracts, permits, employees and liabilities.
- Asset deal (activa-passivatransactie): the buyer acquires specific assets, such as inventory, intellectual property and customer contracts, and assumes specific liabilities. Each asset must be transferred in the manner the law requires for that type of asset, and contracts can only be transferred with the counterparty’s consent (Article 6:159 of the Dutch Civil Code, BW).
- Legal merger (Article 2:309 BW): one company is absorbed into another. The companies draw up a merger proposal, which is filed with the trade register and announced publicly. Creditors can oppose the merger within one month of that announcement (Article 2:316 BW). Cross-border mergers within the EU are also possible under specific rules.
- Legal demerger (juridische splitsing, Article 2:334a BW): the reverse of a merger, often used to separate a business before a sale.
Companies pursue mergers and acquisitions for various reasons: economies of scale, access to new markets, technology or talent, or diversification. Buyers also increasingly look at digital capabilities and at businesses that contribute to the energy transition. Whatever the motive, the legal structure must match it. A buyer who wants a clean start will usually prefer an asset deal; a buyer who needs the target’s permits and contracts will usually prefer a share deal.
How does a typical acquisition process run?
A typical process runs from a letter of intent, through due diligence and negotiation of the purchase agreement, to signing and completion. The steps between signing and completion depend on the approvals that are needed.
The process usually starts with a non-disclosure agreement and a letter of intent (LOI) setting out the price, the structure and the main conditions. An LOI is often expressed to be non-binding, but some provisions, such as exclusivity and confidentiality, are usually binding. Under Dutch law, negotiations may not be broken off at will in every stage: in an advanced stage, breaking off can lead to liability for costs incurred or, exceptionally, for lost profit.
Next, the buyer carries out due diligence: an investigation of the target’s legal, financial, tax and commercial position. This is also the moment to assess cultural fit and integration risks. The findings feed into the price, the warranties and any specific indemnities in the share purchase agreement (SPA) or asset purchase agreement (APA).
At signing, the parties are bound by the agreement. Completion follows when the conditions precedent are met, for example ACM clearance, investment screening clearance or the works council’s advice. In a share deal, the shares are transferred at completion by notarial deed, and the buyer pays the purchase price. Well-organised transactions combine careful planning, a clear risk assessment and good communication with employees, customers and suppliers.
Which areas of law play a role?
An acquisition touches on corporate law, contract law, employment law, competition law and tax law, and often also on real estate, intellectual property and data protection. Each area brings its own requirements and risks.
For this reason, M&A transactions are usually team work: lawyers, a civil-law notary, tax advisers and financial advisers each cover part of the transaction. Tax structuring, and in particular international tax structuring, is a specialist field; we work with tax advisers for that part. Foreign buyers in particular should be aware of the specific Dutch requirements, such as the notarial deed and the role of the works council. You can read more about business transactions in the Netherlands and the legal pitfalls foreign companies should avoid.
Many transactions succeed or fail on integration. Cultural differences, uncertainty among employees and operational continuity deserve attention from the outset. Clear agreements on transitional services, retention of key staff and communication help to keep the business running while ownership changes.
What is the legal framework for M&A in the Netherlands?
The main rules are in Book 2 (legal entities) and Book 7 (specific contracts, including employment) of the Dutch Civil Code, the Works Councils Act (Wet op de ondernemingsraden, WOR), the Competition Act (Mededingingswet) and the investment screening legislation. For listed companies, the Financial Supervision Act (Wet op het financieel toezicht, Wft) adds rules on public offers.
When must you notify the ACM?
A concentration must be notified to the ACM if the parties together had a worldwide turnover of more than €150 million in the previous calendar year, and at least two of them each had a turnover of at least €30 million in the Netherlands (Article 29 of the Competition Act). Lower thresholds apply in the healthcare sector.
After notification, a waiting period of four weeks applies, during which the transaction may not be completed. If the ACM considers that the concentration may significantly impede competition, it can require a licence; the ACM then has thirteen weeks to decide on the licence application. Completing a notifiable transaction without clearance can lead to a substantial fine. If the turnover thresholds of the EU Merger Regulation are met, the European Commission is competent instead of the ACM.
The table below summarises the main regulators and approval requirements in Dutch M&A.
| Regulator or requirement | Role |
|---|---|
| Authority for Consumers and Markets (ACM) | Reviews concentrations that meet the Dutch turnover thresholds |
| Turnover thresholds | More than €150 million combined worldwide, and at least two parties with €30 million or more each in the Netherlands |
| Notification and waiting period | Four weeks after notification; no completion before clearance |
| Investment Screening Act (Wet Vifo) | Notification to the Investment Screening Bureau (BTI) for vital providers, business campuses and sensitive technology |
| Works council and trade unions | Advice under Article 25 WOR; notification under the SER Merger Code |
| Sanctions | Fines for completing without clearance; a decision taken without proper works council advice can be challenged |
When does investment screening apply?
Since 1 June 2023, the Investment Screening Act (Wet veiligheidstoets investeringen, fusies en overnames, Wet Vifo) requires notification of certain acquisitions to the Investment Screening Bureau (Bureau Toetsing Investeringen, BTI). This applies to investments in vital providers, managers of high-tech business campuses and companies active in sensitive technology, such as military and dual-use goods.
Both the investor and the target must notify the acquisition. The BTI assesses whether the investment poses a risk to national security. If it does, conditions can be imposed and, as a last resort, the investment can be prohibited. The transaction may not be completed until the assessment has been completed. The Act applies regardless of the nationality of the investor, so Dutch and EU buyers must also check whether it applies.
What should due diligence cover?
Dutch law does not oblige a buyer to carry out due diligence, but a buyer who does not investigate runs a real risk. A buyer is expected to investigate the target, while the seller has a duty to disclose information that it knows is important to the buyer.
How those duties relate to each other depends on the circumstances. As a rule, a seller cannot rely on the buyer’s failure to investigate if the seller withheld information it was obliged to share. Even so, a buyer who relies only on the general law will often find it difficult to recover losses after completion. That is why due diligence and contractual warranties are standard in Dutch transactions.
A legal due diligence typically covers:
- corporate matters: the shareholder register, articles of association, previous share transfers and any pledges;
- material contracts, in particular change-of-control clauses that allow a counterparty to terminate when the target is sold;
- employment: employment contracts, collective labour agreements, pension arrangements and pending disputes;
- intellectual property, IT and data protection;
- real estate, permits and environmental matters;
- litigation, claims and regulatory investigations.
The outcome of the due diligence determines the next steps. Known risks are usually covered by a specific indemnity or a reduction of the price, while unknown risks are covered by warranties. Warranties are statements by the seller about the state of the company; if a warranty turns out to be incorrect, the buyer can claim compensation within the limits agreed in the contract, such as a maximum amount, a minimum threshold and a time limit for claims. Buyers and sellers increasingly use warranty and indemnity insurance to cover these risks.
How is the purchase price determined?
The two common price mechanisms are completion accounts and the locked box. With completion accounts, the price is adjusted after completion based on the balance sheet at the completion date. With a locked box, the price is fixed on the basis of an earlier balance sheet, and the seller undertakes that no value will leak from the company between that date and completion.
Earn-out arrangements, where part of the price depends on future results, are also common, especially when the seller remains involved in the business. They require precise definitions and agreements on how the business will be run during the earn-out period, because unclear earn-out provisions easily lead to disputes.
What are the rules on employees, the works council and trade unions?
If the target has a works council, it must be asked for advice on a proposed transfer of control, at a time when the advice can still influence the decision (Article 25 WOR). If the company then takes a decision that departs from the advice, it must wait one month before implementing it, and the works council can appeal to the Enterprise Chamber within that period (Article 26 WOR).
The advice right usually lies with the works council of the company that takes the decision, which may be the seller, the buyer or both. In practice, the SPA is often signed subject to the works council’s advice, or the parties first sign a binding offer and only sign the SPA after the advice has been obtained. In addition, the SER Merger Code requires the parties to inform the trade unions involved in the company in time about a proposed merger or acquisition, if the company has fifty or more employees.
In an asset deal that qualifies as a transfer of an undertaking (Article 7:662 BW and following), the employees transfer to the buyer by operation of law, with the same terms and conditions. The seller remains jointly liable for obligations arising before the transfer for one year. The buyer cannot choose which employees to take over, and dismissal because of the transfer is not allowed. These rules often weigh heavily in the choice between an asset deal and a share deal.
Successful transactions go beyond formal compliance. Parties that involve the works council early, communicate openly with employees and plan the integration carefully avoid delays and disputes. That approach also supports good governance and the trust of stakeholders after the deal.
What additional rules apply to listed companies?
The acquisition of a listed company usually takes place through a public offer, which is regulated by the Financial Supervision Act and supervised by the Dutch Authority for the Financial Markets (AFM). A party that acquires 30 percent or more of the voting rights in a listed company must in principle make a mandatory offer for all shares (Article 5:70 Wft).
After a successful offer, a shareholder holding at least 95 percent of the capital can start squeeze-out proceedings before the Enterprise Chamber to acquire the remaining shares (Articles 2:92a and 2:201a BW). Public offers involve strict timetables and disclosure obligations, and need to be prepared with specialist advice.
What should businesses and individuals consider before a transaction?
Before a transaction, assess whether it makes financial and strategic sense, which approvals are needed and how the businesses will be integrated. Those three questions determine the structure, the timetable and the contract.
How do you assess the financial and strategic case?
Start with the business case: what does the transaction add, what are the realistic synergies and what are the risks? A financial due diligence, together with valuation and financial modelling, gives insight into the value of the target and the assumptions behind the price.
Look beyond the purchase price. Transaction costs, financing costs, tax consequences and the costs of integration all affect the return. Interest rates and market conditions influence how the transaction can be financed. Tax consequences can be decisive for the choice between a share deal and an asset deal, and should be assessed by a tax adviser at an early stage.
Which regulatory questions should you check early?
Check early whether the transaction must be notified to the ACM or the BTI, whether sector-specific permits are affected and whether the works council must be consulted. These steps determine the timetable between signing and completion.
Sector-specific rules may apply as well. Acquisitions of financial institutions require a declaration of no objection from the Dutch central bank (De Nederlandsche Bank, DNB), and in the healthcare sector a concentration test by the Dutch Healthcare Authority (Nederlandse Zorgautoriteit, NZa) may be required. Environmental, social and governance (ESG) aspects also play a growing role, for example because of sustainability reporting obligations and the expectations of investors and financiers.
How do you prepare for integration?
Plan the integration before completion. Technical compatibility, the transfer of data and systems, the retention of key employees and differences in culture determine whether the expected value is actually achieved.
In many transactions, technology is the reason for the deal: the buyer wants to acquire software, data, knowledge or digital infrastructure. Due diligence should then focus on who owns the intellectual property, whether the software uses open-source components under restrictive licences, and whether personal data may be transferred and used by the buyer under the General Data Protection Regulation (GDPR).
The energy transition and sustainability also influence many transactions. Buyers look for businesses with sustainable technologies, but also examine the environmental risks and permits of the target. In energy-related transactions, specific permits, grid connections and subsidies often need to be transferred or amended.
A clear integration plan, agreements on transitional services from the seller, and retention arrangements for key staff reduce the risks. Those involved in a transaction benefit from combining financial, legal and strategic knowledge, and from updating that knowledge as the market and the rules change.
Which developments affect Dutch M&A today?
Dutch M&A is increasingly shaped by screening of foreign investment, attention to technology and the energy transition, and closer scrutiny of competition. For buyers, this means more approvals to plan for and more attention to specific risks in due diligence.
Which sectors attract acquisitions?
Buyers show interest in sectors where technology is changing business models, such as healthcare, financial services, energy, semiconductors, software and cybersecurity. Each of these sectors has its own regulatory requirements that affect the transaction.
In healthcare, digital services and data-driven care are growing, and acquisitions may require an NZa concentration test in addition to ACM review. In financial services, collaborations and acquisitions between banks, insurers and fintech companies are subject to supervision by DNB and the AFM.
The table below shows sectors often mentioned in relation to Dutch M&A and the legal points that deserve attention in each.
| Sector | Typical driver | Legal point of attention |
|---|---|---|
| Healthcare | Digital care, data | NZa concentration test, lower ACM thresholds, medical data |
| Financial services | Fintech integration | Declaration of no objection from DNB, AFM supervision |
| Renewable energy | Energy transition | Permits, grid connections, subsidies |
| Semiconductors and high-tech | Technological innovation | Investment screening (Wet Vifo), export controls |
| Software and cybersecurity | Digital transformation, AI | IP ownership, open-source licences, GDPR, NIS2 obligations |
What does technology mean for the legal side of a deal?
Where a buyer acquires a company for its technology, the value lies in intellectual property, data and people. The legal due diligence and the warranties must be tailored to that.
Buyers should check whether all rights to software and other technology lie with the target, whether employees and freelancers have transferred their rights, and whether the technology falls under export controls or the investment screening rules. For AI applications, the EU AI Act adds requirements that may affect the value and use of the technology. In the renewable energy sector, the transfer of permits and subsidies is often a condition for completion.
What economic and geopolitical factors play a role?
Interest rates, the availability of financing and geopolitical tensions influence both the number and the structure of transactions. Geopolitical developments have also led to stricter investment screening in the Netherlands and other EU countries.
Cross-border transactions require coordination between different legal systems and regulators. Since October 2023, certain acquisitions involving companies that have received subsidies from non-EU countries must also be notified to the European Commission under the EU Foreign Subsidies Regulation (2022/2560). Buyers therefore need to map all approval requirements early, both in the Netherlands and abroad. The Netherlands remains an attractive location for transactions, with a predictable legal framework, specialised courts such as the Enterprise Chamber, and an innovative business environment.
In summary
- Most Dutch acquisitions are share deals or asset deals; a legal merger is used mainly within groups. The choice determines which liabilities, contracts and employees come along.
- Shares in a BV are transferred by notarial deed; in an asset deal that is a transfer of an undertaking, employees transfer automatically.
- Ask the works council for advice in time (Article 25 WOR) and inform the trade unions under the SER Merger Code.
- Check early whether ACM clearance (above €150 million combined and €30 million each for two parties in the Netherlands) or Wet Vifo screening is needed.
- Due diligence, warranties and indemnities do most of the work in allocating risk between buyer and seller.
Frequently asked questions
What are mergers and acquisitions?
In an acquisition, a buyer acquires another company, either by buying its shares or by buying its assets and liabilities. In a merger, two businesses combine. Under Dutch law, a legal merger means that one company ceases to exist and its assets and liabilities pass to the other by operation of law.
How does the legal framework for M&A operate in the Netherlands?
The main rules are in the Dutch Civil Code (company law, contracts and transfer of undertakings), the Works Councils Act, the Competition Act and the Investment Screening Act. Shares in a BV are transferred by notarial deed. Transactions above the turnover thresholds must be notified to the Authority for Consumers and Markets, and certain investments to the Investment Screening Bureau.
What are the primary motivations for businesses pursuing M&A in the Netherlands?
Businesses pursue acquisitions to grow, to enter new markets, to acquire technology, knowledge or staff, to diversify their products or to achieve economies of scale. The motive affects the choice of structure: a buyer that needs the target’s permits and contracts will usually prefer a share deal.
What trends should investors be aware of in the M&A landscape in the Netherlands?
Investors should take into account stricter investment screening under the Wet Vifo, notification obligations under the EU Foreign Subsidies Regulation, sector-specific approvals in healthcare and financial services, and growing attention to intellectual property, data and sustainability in due diligence.
How can Law & More help with your M&A transaction?
An acquisition or merger in the Netherlands involves many moving parts: the structure, due diligence, the purchase agreement, the works council, and the approvals of the ACM and the BTI. Law & More, with offices in Eindhoven and Amsterdam, assists buyers and sellers, including international companies, from the letter of intent to completion. We work alongside your notary and tax adviser and keep the transaction on track. You can find more about our work on corporate mergers and acquisitions on our website, or contact a lawyer at Law & More directly.
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