NETHERLANDS Trends and Developments Contributed by: Herald Jongen, Maarten de Boorder, Samuel Garcia Nelen and Jelmer Kalisvaart, Greenberg Traurig, LLP
ogies, especially relatively nascent ones like quantum or photonic technology, that require equity funding. In response to the evolving technological and security landscapes, the Dutch government has announced its intention to broaden the scope of the NSI Act. The proposed expansion will encompass sectors such as biotechnology, AI, advanced materials and nanotech- nology, and sensor and navigation technology, as well as nuclear technology for medical applications. Stakeholders in these sectors should monitor further developments closely, as the proposed changes could have significant implications for compliance require- ments, investments and transactions. The Introduction of the EU Foreign Subsidies Regulation The EU Foreign Subsidies Regulation (FSR) entered into force on 12 January 2023 and creates a regime aimed at combatting distortions of competition on the EU internal market caused by foreign subsidies. It imposes mandatory notification and approval require- ments on acquisitions of businesses with significant EU operations and large EU public tenders and gives the European Commission (EC) the power to launch ex officio investigations. Since 12 October 2023, the notification obligations have been fully applicable. Companies that are active in the EU (or plan to invest in the EU or participate in EU public tenders – whether in technology or otherwise) and have received “finan- cial contributions” from non-EU countries need to put in place systems for gathering the information required for FSR. To avoid delaying transactions, any company potentially active in larger M&A transactions having an effect within the EU should start prepara- tions well in advance. Notifiable transactions must be approved by the EC before they can close, creating a standstill obligation. Given the above, companies contemplating an M&A deal should consider the FSR, in addition to foreign direct investments and other regulatory aspects. Regulatory Influence on Data Centre Transactions The legal landscape concerning data centres in rela- tion to M&A is influenced by several key trends. These trends encompass regulatory compliance, environ-
mental considerations and evolving discussions about EU sovereignty in the cloud, all of which are critical for companies involved in data centre transactions. There are increasing objections from people living near data centres and environmental groups regard- ing the way the landscape and views are affected, as well as energy consumption. The establishment and operation of data centres is subject to various local and national regulations, including zoning laws and environmental permits. The Dutch Environmental Protection Act ( Wet milieu- beheer ) and other related regulations require that data centres comply with strict environmental standards, especially regarding energy consumption and emis- sions. Obtaining the necessary permits can be a lengthy pro- cess, often requiring comprehensive impact assess- ments. Companies looking to acquire data centres must ensure that the target complies with these per- mitting requirements, as non-compliance can lead to delays or fines. Sustainability and Energy Efficiency Regulations The focus on ESG has penetrated business society, with companies increasingly trying to adopt sustain- able technologies and practices to address ESG challenges, including the energy transition. But since President Trump has been in power, the focus on ESG has decreased, including in the EU. It is not yet clear how this will evolve in the Netherlands. Legal requirements increasingly mandate the use of renewable energy sources and the implementation of energy-efficient technologies. Acquirers must evaluate whether the target data centre meets these sustain- ability criteria during the M&A due diligence process. If the target concerns a data centre, the target may be required to report annually on the energy efficiency of that data centre. Local Data Sovereignty Issues In the EU, there is an ongoing debate about the need to build EU-only tech infrastructure (cloud and more) to avoid further vendor lock in and dependency on non-EU providers. This will further fuel large invest- ments.
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