Getting a merger, acquisition, or joint venture approved

Do you own a company in the Netherlands? And do you want to merge with another company, take over (acquire) another company, or set up a joint venture? You may need to notify your plans and get a merger proposal approved.

Notification of major mergers and acquisitions

Large companies that plan to merge, must notify the Authority Consumer and Market (Autoriteit Consument en Markt, ACM, in Dutch) in advance. You may have to file a merger notification if you:

• merge with another company
• take over (a part of) another company
• set up a joint venture

The ACM checks if companies do not become too big due to the merger, takeover (acquisition), or joint venture, and whether the merger has no negative consequences for competition. All companies should have a fair chance in the market.

Whether you have to notify a merger, takeover, or joint venture depends on your turnover and the turnover of the company or companies you are merging with (in Dutch). If you are obliged to file a notification, you are only allowed to merge if the ACM approves. Do you merge with another company without notifying the ACM in advance? You may be fined.

Mergers in the healthcare sector (in Dutch) must first be approved by the Dutch Healthcare Authority (Nederlandse Zorgautoriteiten). For pension funds (in Dutch) specific rules apply.

Applying for a licence

In some cases the ACM will not give you immediate permission for the merger, acquisition, or joint venture. In such cases, you must first apply for a licence to the ACM (in Dutch). The ACM will then further investigate your plans and decide if the merger, acquisition, or joint venture can still go ahead (subject to conditions).

Notification of a change in control of essential processes

Does your company carry out processes essential to society? For example, internet and data services, or the distribution of electricity or gas? Or does your company have sensitive technology? If so, you need to report changes in who has control of the company to the Investment Screening Bureau (Bureau Toetsing Investeringen, BTI). The Investments, Mergers and Acquisitions Security Screening Act (Wet Veiligheidstoets investeringen, fusies en overnames, Wet Vifo) has introduced a security check for investments, mergers, and takeovers that may pose a risk to national security. If certain (foreign) parties get influence in essential processes in the Netherlands through investments, mergers and acquisitions, this could be a security risk. If critical processes fail or are disrupted, this can have serious consequences for society.

After the notification, the BTI does a security test and determines if there is a security risk. If there are risks, the BTI may impose conditions or prohibit the investment, merger, or acquisition.

Economic Security Information Point for Businesses

The website of the Economic Security Information Point for Businesses (Ondernemersloket Economische Veiligheid, OLEV, in Dutch) contains the latest information on various economic security topics, including export control of strategic goods and the Investments, Mergers and Acquisitions Security Screening Act. SMEs can also request advice on possible risks and control measures they can adopt to mitigate those risks.

Notify mergers for employees

Do you have more than 50 employees or are there merger rules specified in the Collective Labour Agreement (CAO) of your company? You will also have to report your merger to the Social and Economic Council (SER) and the trade unions. You can read more about this in the SER Merger Code (pdf).

Conditions for merger

Only companies that have the same legal structure can merge. A private limited company can merge with another private limited company, but not with an association, for instance.

You are not allowed to merge if your company has been dissolved or is in involuntary liquidation.

Approval of a merger proposal

If you plan to merge with another company, you should prepare a merger proposal. A merger proposal should at least include:

• the name, location, and legal structure of the merging parties, and of the company resulting from the merger
• the planned composition of the new management and supervisory board
• how the shares and how many shares of the new company will be offered to shareholders
• the impact on business operations and employees
• the date after which the new holders will have the right to dividend
• statutes of the company resulting from the merger
• information on the assets and liabilities transferred to the new company

You must file the merger proposal in the Business Register, and you have to publish an announcement of the proposed merger in a national newspaper. After the opposition period of 1 month has expired, all companies involved decide on the merger proposal in the general meeting. If all parties agree on the merger proposal and no objections have been received, the civil-law notary can declare the merger or company acquisition valid. After that, you must register the merger in the Business Register within 8 days. Each company involved must publish information about the merger in the Business Register.