NETHERLANDS Trends and Developments Contributed by: Herald Jongen, Maarten de Boorder, Samuel Garcia Nelen and Jelmer Kalisvaart, Greenberg Traurig, LLP
firms and tech companies, paving the way for potential M&A deals during the coming years. Navigating open-source software trends in M&A In the Netherlands, open-source software (OSS) is a significant driver of M&A activity, especially in tech-driven sectors like fintech, AI and cloud computing. Several trends are emerging as com- panies leverage OSS for innovation, but there are also unique challenges tied to the Dutch regulatory and business environment. Dutch technology companies are increasingly adopting and contributing to open-source busi- ness models, particularly in sectors like fintech, cloud computing and AI. Companies using OSS in hybrid models (offering free OSS with paid premium services or cloud offerings) are attrac- tive M&A targets due to their scalability and wide developer adoption. In the Netherlands, the active open-source community plays a crucial role in the success of OSS-driven businesses. Acquirers are often drawn to the strength of a target company’s developer ecosystem. Companies that con- tribute actively to global open-source projects or maintain strong community ties are seen as valuable. This is particularly important in M&A, where sustaining the community and maintain- ing development momentum post-acquisition are key to the long-term success of an open- source project. The academic track record in technology and the start-up scene are other key drivers in this respect. It is essential to be aware of the risk of losing intellectual property (IP) and related value asso- ciated with the use of copyleft licences (eg, the General Public License (GPL) and the Mozilla Public License (MPL)), which require that any
software incorporating open-source code also be released under the same copyleft licence; this risks making the entire platform open source and available to others for free. This is an important topic for due diligence. Generally, if the answer to the question “Do you use OSS?” is “No”, this should be a cause for concern as, realistically, every company uses OSS. As part of due diligence in Dutch technology M&A, companies must also ensure the imple- mentation of robust cybersecurity protocols around the use of OSS. With the rise of cyber- security regulations like the EU’s NIS2 Directive and the General Data Protection Regulation GDPR, companies in the Netherlands are under pressure to manage open-source vulnerabilities proactively. For example, any failure to patch known vulnerabilities or handle data breaches involving OSS can result in regulatory penalties. This has prompted companies to enhance their security audits of open-source components dur- Regulatory scrutiny has increased, particu- larly for larger tech deals, as Dutch authorities align with EU regulations to curb monopolistic behaviours and protect market competition. This has extended the timeline for larger deals and deterred some larger deals from proceeding. In 2023, an increasing number of jurisdictions subjected foreign and national investments to prior screening by means of a system known as “foreign direct investment screening”. On 1 June 2023, the Netherlands introduced its National Security Investment Act ( Wet veilig- heidstoets investeringen, fusies en overnames or the “NSI Act”), following the publication of two ministerial decrees: the Sensitive Technol- ogy Decree ( Besluit toepassingsbereik sensi- ing the M&A process. Regulatory pressures
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