NETHERLANDS Law and Practice Contributed by: Maarten de Boorder, Rutger Sterk, Bas Vletter and Samuel Garcia Nelen, Greenberg Traurig, LLP
On the other hand, the drive to secure supply chains is expected to act as a catalyst for M&A activity across various industries in 2025, from automotive to health- care to electronic components and chemicals. Bolt-on vertical acquisitions (ie, add-ons by existing portfolio companies), strategic alliances and joint ventures are expected to ensure access to scarce resources and stability in supply chains for portfolio companies. It is noteworthy that 2025 has again seen increased interest on the part of PE funds in medium-size accounting firms. On the other hand, PE’s involve - ment in the Dutch healthcare sector has become the subject of public scrutiny, influencing both entry and exit strategies for 2025. 2. Private Equity Developments 2.1 Impact of Legal Developments on Funds and Transactions Changes in the regulatory landscape have impacted PE funds the most during the last few years, and transactions continue to be heavily scrutinised by competition regulators. In addition, the foreign direct investment (FDI) legislation that has come into force (see 3. Regulatory Framework for more details) is impacting the structuring of deals. The implementation of the Corporate Sustainability Reporting Directive (CSRD) is now impacting large portfolio companies, with reporting obligations for FY 2024 and beyond. Enhanced scrutiny from compe - tition regulators and the ongoing application of the Dutch National Security Investment Act (the “NSI Act”; Wet veiligheidstoets investeringen, fusies en overnames ) and the EU Foreign Subsidies Regulation (FSR) are shaping deal structuring and execution. PE funds are adapting to these changes by investing in compliance and risk management capabilities. 3. Regulatory Framework 3.1 Primary Regulators and Regulatory Issues In the Netherlands, the Authority for Financial Markets ( Autoriteit Financiële Markten or AFM) is the primary supervisor for investment fund managers that are
licensed or registered under the Alternative Invest - ment Fund Managers Directive (AIFMD). The AIFMD captures PE managers. The AFM is responsible for the initial licensing process and ongoing supervision in respect of conduct and compliance. The Dutch Cen - tral Bank ( De Nederlandsche Bank or DNB) is involved in prudential supervision on ensuring the soundness of financial enterprises and the stability of the financial system. PE transactions may be subject to merger clearance, FDI, EU foreign subsidies review and, possibly, sector-specific regulatory approvals (eg, for financial institutions, healthcare or utilities targets). The most notable and relevant authorities for PE funds are outlined in the following. Merger Control The Netherlands Authority for Consumers and Mar - kets (ACM) is the Dutch competition authority respon - sible for merger control. A mandatory pre-merger fil - ing in the Netherlands is required for a transaction – whereby a direct or indirect change of control is contemplated – if, in the last calendar year: • the combined worldwide turnover of the compa - nies concerned was EUR150 million or more; and • the turnover in the Netherlands of each of at least two of the companies concerned was EUR30 mil - lion or more. In case of a notification, a so-called standstill obliga - tion applies, whereby a proposed transaction may not be effected until clearance has been obtained (effect - ing a transaction prematurely is called “gun-jumping”). In addition, the ACM monitors compliance with Dutch competition law. In M&A transactions, parties need to be cautious when negotiating certain clauses, such as protective covenants, which may exceed the limits of what is necessary for (the implementation of) the transaction. Furthermore, in the period up to comple - tion of the transaction, the parties should ensure that the transaction is not effectuated, for example, by the purchaser exercising decisive influence over the target de jure via certain pre-closing covenants, or de facto, and that the parties do not share commercially sensi - tive information – in both cases to protect against the risk of gun-jumping.
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