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What are the Dutch laws and regulations govern M&A transactions in the Netherlands?
While there aren’t any specific M&A codes or statutes in the Netherlands parties are generally in the position of deciding on their contractually governed acquisition rules. These could include clauses on due diligence information qualifiers, confidentiality and knowledge. Particularly for financial companies with a registered office in the Netherlands There are specific rules that are contained in the Merger Code and the Public Takeover Bid Decree.
Typically, M&A transactions in the Netherlands are typically share deals (i.e. the acquisition of shares) and mergers and demergers can also be possible (where the assets and liabilities of a company cease to exist and are acquired by a different company). If the public sector is involved in an M&A deal is involved, Dutch law on works councils or (in absence of the body) the laws from the country of incorporation will govern the procedure.
Individual shareholders, regardless of whether they have either a majority or minority stake in the target company, have certain rights under Dutch law and the company’s articles of association. The target board is under the obligation to provide adequate information to all interested shareholders regarding the M&A deal to allow them to make an informed choice. Individual shareholders may halt any transaction if the target board does not do this.
Typical legal due diligence work streams (although the exact scope of the work will typically depend on the agreed M&A scope, the business of the target and structure of the deal) include commercial contracts (customer distributor, supplier and agreements) as well as financing agreements (bank and shareholder loans) Real estate (owned and leased), IP and pension and employment issues. Compliance issues, such as corruption, anti-bribery, and money laundering as well as data protection, are also top of the list.
