What Dutch laws and regulations apply to M&A transactions?
In the Netherlands, there are no specific M&A laws or codes. Parties are free to choose their own rules of acquisition. This can include provisions on due diligence, knowledge qualifiers and confidentiality. For financial sector companies that have a registered address in the Netherlands the Merger code and the Public Takeover Bid Decree contain certain rules.
Typically, M&A transactions in the Netherlands take the form of share deals (i.e. acquisitions of shares) and legal mergers or demergers (where all or a part of the assets or liabilities of an entity that ceases exist are acquired and assumed by a different company). If there is a public M&A deal is involved, Dutch law on works councils or (in absence of an entity) the laws of the country of incorporation govern the procedure.
Dutch law and articles of association give individual shareholders certain rights, regardless of whether they own a majority or minority stake in the target. The target board has an obligation to provide complete information to all shareholders interested regarding the M&A deal to allow them to make an informed decision. If the target board fails in this regard and the shareholders are not informed, they can stop the transaction from going ahead.
Typical legal due diligence work streams (although the precise scope of this work will often depend on the M&A scope, the business of the target, and the structure of the deal) include commercial contracts (customer, supplier and distribution agreements) and financing agreements (bank and shareholder loans), real estate (owned and leased) IP, employment and pension matters. Compliance issues, including anti-bribery, corruption and money laundering, as well as data protection, are also important to be addressed.