Rules for mergers and changes in control

Do you own a company in the Netherlands? And do you want to amalgamate with another company? You can do this by:

• merging with another company
• taking over (a part of) another company
• setting up a joint venture

Notification of a merger, takeover, or joint venture

Large companies that plan to merge, must notify the Authority Consumer and Market (Autoriteit Consument en Markt, ACM,in Dutch) in advance. This is called a merger notification. The ACM checks if the merger has no negative consequences for competition. All companies should have a fair chance in the market.

Whether you have to notify a merger, takeover or joint venture, depends on your turnover. In the healthcare sector (in Dutch) and for pension funds (in Dutch) different rules apply.

You are only allowed to merge if the ACM approves. Do you merge with another company without notifying the ACM in advance? You may be fined.

Apply for a licence

In some instances the ACM will not give you immediate permission for the merger, acquisition, or joint venture. In such cases, you must first apply to the ACM for a licence (in Dutch). The ACM will then further investigate your plans.

Rules for mergers

• Do you have to report your merger to the ACM? Or do you employ more than 50 staff? You will likely also have to report your merger to the Social and Economic Council (SER) and the trade unions. You can read more about this in the SER Merger Code (pdf).
• Only companies that have the same legal structure can merge. A private limited company can merge with another private limited company, but not with an association, for instance.
• You are not allowed to merge if your company has been dissolved or is in involuntary liquidation.

Drafting a merger proposal

If you plan to merge with another company, you may need to get expert advice. Important steps to take are:

• You should prepare a merger proposal, with information on the legal structure, name and location of the parties, and the planned composition of the new management.
• You must file the merger proposal in the Business Register. Depending on your legal structure, you may also have to file financial statements and annual reports.
• The merger proposal must remain public in the Business Register for at least 6 months. If no objections have been received, then the civil-law notary can declare the merger or company acquisition valid.

Notification of a change in control

Does your company carry out processes vital to society? Or does your company have sensitive technology? If so, you need to report changes in who has control of the company to the Bureau for Verification of Investments (Bureau Toetsing Investeringen, BTI, in Dutch). The Investments, Mergers and Acquisitions Security Screening Act (Wet veiligheidstoets investeringen, fusies en overnames, Vifo) has introduced a security check for investments, mergers, and acquisitions that may pose a risk to national security. The security check applies to 2 types of companies established in the Netherlands:

• suppliers of critical processes
• companies that have sensitive technologies

Investments, mergers, and acquisitions in these types of companies may lead to national security risks. This notification requirement applies retroactively from 8 September 2020.

Economic Security Information Point for Businesses

The website of the Economic Security Information Point for Businesses (Ondernemersloket Economische Veiligheid, OLEV, in Dutch) contains the latest information on various economic security topics, including export control of strategic goods and the Investments, Mergers and Acquisitions Security Screening Act. SMEs can also request advice on possible risks and control measures they can adopt to mitigate those risks.