[Last updated: 1 January 2025, unless otherwise noted]

2.1 Competent authorities

The Dutch Authority for the Financial Markets (Autoriteit Financiële Markten) ("AFM") is the authority that supervises the operation of the financial markets in the Netherlands and is responsible for ensuring that: (i) no public offer is made without an approved public offer document, (ii) such offer document is made publicly available and (iii) there is compliance with the rules and regulations relating to the public offer and the process.

The Enterprise Chamber of the Amsterdam Court of Appeal (Ondernemingskamer van het Gerechtshof te Amsterdam) ("Enterprise Chamber") has jurisdiction over squeeze-out procedures designed for public offers and mandatory offers. In addition, the Enterprise Chamber is the competent court in "inquiry procedures" (enquêteprocedures), the scope of which is so broad that it has become the preferred corporate litigation venue for, among others, offerors, (major) shareholders or the target company in hostile situations, including shareholders' activism.

2.2 Applicable legislation

The public offer rules are primarily based on the European Directive (2004/25/EC) on public offers. The main public offer rules are set out in the Dutch Financial Supervision Act ("FSA"), the Public Offer Decree ("Decree"), certain exemption decrees (together with the FSA and the Decree, the "Public Offer Rules") and several policy regulations of the AFM. In addition, Book 2 of the Dutch Civil Code ("DCC"), the Dutch Corporate Governance Code, the Works Councils Act and the SER Resolution concerning the Merger Code may also apply in a public offer process.

Several Dutch listed companies have issued depositary receipts for shares ("DRs"), in particular those that are also listed in the United States. Most provisions of the DCC and practically all of the Dutch Public Offer Rules apply to (holders of) DRs. Please note that where reference is made to shares or securities, DRs are also included.

2.3 The Dutch corporate governance system

Historically, the Dutch corporate governance system of legal entities has been based on a two-tier board management system, which means that a Dutch listed company should have two separate corporate bodies: (i) a management board, which consists of the managing directors; and (ii) a supervisory board, which consists of the supervisory directors. The management board's task is to run the company and determine its strategy, whereas the supervisory board's task is to supervise and advise the management board. A managing director is similar to the Anglo-American executive director and the supervisory director bears similarities to the non-executive director in the Anglo-American context.

However, it is possible to combine both corporate bodies into one and have a "one-tier" board management board. A one-tier board consists of both executive directors (similar to managing directors in the two-tier board system) and non-executive directors (similar to supervisory directors in the two-tier board system). Since 2010, the one-tier board system has been incorporated in Dutch statutory law. The one-tier board system has become increasingly popular, and is, not surprisingly, often the management board system of international groups of non-Dutch origin.

The tasks, duties and responsibilities of (the members of) the management board and supervisory board are included in the DCC. Furthermore, the Dutch Corporate Governance Code ("Code") applies to Dutch public limited companies listed on a regulated market. The Code contains principles and best practice provisions that regulate relations between the boards and the shareholders. Compliance with the Code is based on the "comply or explain" principle, which means that the company either applies the principles or deviates from them. Any deviations from the principles and best practice provisions must be specifically disclosed in writing (in a separate chapter of the company's annual report) setting out why and to what extent a particular principle does not apply.

The DCC's principle of "collective responsibility" is also relevant. Pursuant to this principle, each managing director (or, in a one-tier board, the executive and non-executive directors) is responsible for the general course of business and proper management of the company and is therefore jointly and severally liable for any improper performance by the board or any board member of their duties (onbehoorlijk bestuur).

2.4 General principles applicable to public offers

(a) Market transparency

Pursuant to the principle of market transparency, access to information on a target company should be equal for all investors. By doing so, instances of insider trading occur less frequently and disclosure irregularities are prevented. This principle is implemented in the Market Abuse Regulation (No 596/2014 EC) ("MAR") and Dutch regulations on market abuse (together, the "Market Abuse Rules") and applies to companies listed on Euronext Amsterdam. The Market Abuse Rules prescribe that listed companies have to publicly disclose inside information that, if made public, would be likely to have a significant effect on the share price ("Inside Information"). For a further explanation on the obligations under the MAR, see 2.5.

(b) Level playing field

The offer should be addressed to all shareholders of the same class or category, and under the same terms and conditions to maintain a level playing field between the shareholders.

2.5 MAR

The MAR came into force on 3 July 2016. One of the main objectives of the MAR is to establish a more uniform interpretation of the European Union market abuse framework.

The MAR contains:

1. specific requirements when, among other things, a company is considering whether to disclose Inside Information in connection with a contemplated public offer, prior to the public announcement of such transaction to its (major) shareholders, i.e., market soundings;
2. an obligation to inform the AFM if a company has used the option to delay the public disclosure of Inside Information pursuant to an exemption. The notification should be made immediately after the public disclosure of Inside Information. When requested by the AFM, companies must also provide a written explanation on how the exemption requirements to benefit from the exemption have been met (see 3.2); and
3. stringent requirements as to the information to be disclosed in the insider lists, such as the obligation to include the date and time at which a person obtained, and ceased to have, access to Inside Information.

On 8 October 2024, the European Council adopted the Listing Act, which aims to amend the Market Abuse Regulation (MAR) with the objective of making EU capital markets more attractive and accessible to companies, particularly small and medium-sized enterprises, while enhancing transparency, market integrity, and investor protection. Part of the amendments to the MAR, specifically related to insider trading rules and market sounding, came into force on 4 December 2024.

The second part of the amendments to the Listing Act, pertaining to the Market Abuse Regulation (MAR), will take effect on 5 June 2026. These amendments address changes to the requirements for delaying the disclosure of inside information and reducing the disclosure obligations related to inside information.

2.6 Alternative methods of acquisition

Other methods to acquire (an interest in) a target company or its business include the following:

1. Asset deal – In an asset deal, a party acquires the business, i.e., the assets and liabilities, of the target company. The advantage of this method is that the party can choose which assets and liabilities it wishes to acquire and acquire full control over the business, which enhances deal certainty. If the transaction concerns the entire or materially all of the target company's business, its shareholders' meeting must approve the contemplated transaction. This method is often used when: (i) the market capitalization of the target company is significantly higher than the value of the business; (ii) there is uncertainty as to the acceptance threshold when a public offer is made; (iii) more favorable from a tax point of view; or (iv) a public offer would encounter major regulatory restrictions.
2. Legal merger – In a legal merger, one company can disappear into the other or the two companies can form a new legal entity in which they will both disappear. In case both companies disappear, the shareholders of these entities will receive listed shares of the new legal entity. Prior to a legal merger, the shareholders' meetings of both companies must approve the merger. Legal mergers can be either domestic or between companies incorporated within the European Economic Area ("EEA"). Shareholders who voted against a cross-border merger in the relevant shareholders' meeting have the possibility of exiting in return for a cash-out. For instance, the EUR 32 billion Ahold/Delhaize merger (listed on Euronext Amsterdam and Euronext Brussels, respectively) is a prime example of a cross-border legal merger. This method offers a great level of deal certainty and is considered to be specifically suitable for mergers of equals.
3. Share purchase deal of a subsidiary – A party may also choose to acquire the business of a target company through a share purchase deal whereby a subsidiary of such target company is acquired. The subsidiary holds and operates the entire business of the target company.

2.7 Governmental prior approval

There are certain sectors in which there are restrictions on the acquisition of control. Such sectors include telecom, gas, and energy. Moreover, on 1 June 2023, the Act on Security Screening of Investments, Mergers and Acquisitions (known as the Vifo Act) entered into force, introducing security assessments for investments, mergers and acquisitions that may pose a risk to national security. The enforcement of the Vifo Act is entrusted to the BTI (Bureau Toetsing Investeringen, which falls under the Ministry of Economic Affairs and Climate).

The Vifo Act applies to acquisition activities involving the following sectors:

• So-called vital services, which include: (i) heat networks; (ii) nuclear energy; (iii) energy extraction; (iv) gas storage; (v) air transport (including Schiphol airport, ground-handling services); (vi) activities related to the port of Rotterdam; (vii) banks with registered offices in the Netherlands; and (viii) certain financial market infrastructure providers, such as trading platforms (additional services may be designated as "vital" by decree).
• Operators of business campuses, defined as undertakings that manage a property on which a collection of companies operate and where public and private actors collaborate on technology and applications that are of economic and strategic importance to the Netherlands.
• Companies active in sensitive technologies, which comprise military items (as listed on the EU common military list) and, with very limited exceptions, dual-use items that fall under the EU Dual-Use Regulation 2021/821. By ministerial decree, certain specific technologies have been designated as "highly sensitive technology", these are: quantum technology, photonic technology, semiconductor technology and high-assurance products. Moreover, currently an amendment is in consultation which (if accepted) would also include (certain subcategories of) biotechnology, artificial intelligence, advanced materials and nanotechnology, sensor and navigation technology, and nuclear technology with medical uses as highly sensitive technology.

Under the Vifo Act, a notification obligation exists for both the acquirer and the target company when there are relevant acquisition activities in these target companies through which the acquirer obtains de jure or de facto control over the target company. Moreover, for companies active in designated ‘highly sensitive technology’ in the Netherlands, the triggering threshold is lowered to “significant influence”, rather than control. Significant influence can exist if as little as 10 per cent, 20 per cent or 25 per cent of voting rights can be exercised or if there is a right to appoint or dismiss one or more board members.

The notification requirement is suspensory such that the stand-still obligation prohibits parties from closing a transaction prior to having received a clearance decision, or before the statutory review period lapses. In the case of public bids for a listed target company, the notification shall be made simultaneously with an announcement of the public bid under the FSA and the Decree. Furthermore, a mandatory bid shall not be declared unconditional before the relevant party is notified that no review is required, or a review has been completed.

Not notifying transactions that should be notified or implementing notified transactions before having obtained approval, can lead to ex officio review proceedings, interim orders and significant administrative fines of up to 10 per cent of the relevant undertaking’s turnover. In the event that the BTI concludes that the investment poses a risk to national security, the BTI may order the parties to the transaction to accept remedies, or even prohibit the transaction.

There is also legislation being prepared specifically aimed at ensuring national security in the defense sector, through the so-called Defense Resilience and Safety Related Sector Act (Wet weerbaarheid defensie en veiligheid gerelateerde industrie). This act foresees, inter alia, the introduction of a new sector-specific investment screening regime for certain undertakings active in the Dutch defense sector. However, it has not yet been implemented.

2.8 Foreign Subsidies Regulation

The Foreign Subsidies Regulation (“FSR”) came into force on 12 January 2023. One of the main objectives of the FSR is tackling competition-distorting aid provided by non-EU governments.

Under the FSR, concentrations must be reported to the European Commission if the following two thresholds are met:

(a) Revenue Threshold: At least one of the merging parties (in the case of a merger), the target company (in the case of an acquisition), or the joint venture is established in the EU and achieved a turnover of at least EUR 500 million in the previous financial year.

(b) Financial Contributions Threshold: The involved companies have collectively received more than EUR 50 million in financial contributions from non-EU countries in the three years preceding the agreement's closing, the public takeover bid announcement, or the acquisition of a controlling interest. This applies to: (i) in the case of an acquisition: the buyer(s) and the target company, (ii) in the case of a merger: the merging companies, (iii) in the case of a joint venture: the joint venture partners and the joint venture itself.

Moreover, bids in response to tenders organized by EU Member State contracting authorities must be notified where:

• the tender has a value of at least EUR 250 million (and, in case the tender is divided in multiple lots, the aggregate value of the lots applied for is at least EUR 125 million); and
• the bidder (and related undertakings including its main subcontractors and suppliers) have received financial contributions of EUR 4 million from a single third country in the three years prior to the notification.

The notion of financial contribution as defined in the FSR is extremely broad. In essence, it covers three main categories:

• The transfer of funds or liabilities: this includes all types of direct transfers of funds (such as grants, fiscal incentives, loans, capital injections/increases, the set-off of operating losses, debt forgiveness), as well as potential direct transfers of funds (e.g., loan guarantees or credit lines).
• The foregoing of revenue that is otherwise due or the granting of special or exclusive rights: this includes different tax or VAT incentives (investment tax credits, R&D credits, etc.), tax exemptions (e.g., exemption from local property tax, patent boxes), reductions in social security contributions, as well as the granting of exclusive concessions without appropriate remuneration (e.g., mining rights or land use rights).
• The provision or purchase of goods or services: this includes any sale to or purchase from a public entity (including private entities which are ultimately controlled by a public authority) regardless of whether the sale/purchase was the subject of a tender procedure or concluded at arms' length/market conditions (e.g., public utility bills for gas, water and electricity, payments for postal services, waste collection and other public services).

A 'financial contribution' is broader than a 'foreign subsidy' and does not need to be specific or provide an advantage. The European Commission can require non-notifiable concentrations to be reported if foreign subsidies are suspected within three years prior.

It should be noted that notifications are mandatory and have suspensory effect, which means that a concentration cannot be implemented, or a large public tender cannot be awarded, before obtaining approval from the European Commission. Failure to comply can attract fines of up to 10% of global revenues.

Reporting foreign subsidies involves a phase 1 assessment (25 working days for concentrations, 20 for public procurement) and a phase 2 investigation (up to 90 working days for concentrations, 110 for public procurement). Parties must identify financial contributions from non-EU governments in the three years before a transaction or tender under the FSR.