NETHERLANDS Law and Practice Contributed by: Herald Jongen, Maarten de Boorder, Samuel Garcia Nelen and Jelmer Kalisvaart, Greenberg Traurig, LLP
by, among other entities, customs authorities and the Dutch Ministry of Foreign Affairs, in close co-operation with the EU and the authorities in other EU member states. 7.5 Antitrust Regulations In the Netherlands, business combinations such as mergers, acquisitions or joint ventures that are not subject to EU merger control may require notification to 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 Nether- lands is required if the following thresholds were met in the last calendar year prior to the transaction: • the combined worldwide turnover of the compa- nies concerned is EUR150 million or more; and • the turnover in the Netherlands of each of at least two companies concerned is EUR30 million or more. Certain sectors may have different, 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 reviews whether a proposed transaction would significantly impede competition in the Dutch market or a substantial part of it, particularly if it would result in the creation or strengthening of a dominant market position. 7.6 Labour Law Regulations If a transaction is structured as a share deal, the acquir- er 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, a “business” is being transferred on a going concern basis, whereby all employees predominantly working for such business automatically transfer to
the acquirer (the new owner) along with their applica- ble employment terms and conditions. This automatic transfer is governed by the Transfer of Undertakings Protection of Employment ( Overgang van onderne- ming or TUPE) regulations or the EU Acquired Rights Directive ( Richtlijn Overdracht van Ondernemingen or ARD). In such a 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 depend- ing 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 pro- ceeding 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 reasonable. Ignoring the works council’s right could have far reaching consequences in court, such as being prohibited to implement the contemplated decision. For transactions primarily concerning the Dutch mar- ket, where either the buyer/s (group) or seller/s (group) has 50 or more employees in the Netherlands, and where the target employs at least ten employees, there is an obligation to notify the Dutch Social Eco- nomic Council ( Sociaal-Economische Raad or SER) and any relevant trade unions in a timely manner of the proposed transaction (ie, well ahead of the deal’s closure in order for trade unions and works council(s), if any, to have meaningful influence). Trade unions may also request consultations regarding the transaction’s social and economic impact on employees. For employee incentive plans from a Dutch tax per- spective, recent legislative changes have shifted the Dutch wage tax point for certain employee stock option plans from the moment of exercise to the liquidity event. This is particularly relevant for tech-
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