Publikation
What M&A trends will transform the 2024 insurance landscape?
It is widely accepted that 2023 was one of the worst years in recent memory for M&A activity.
Global | Publikation | July 2023
On May 18, 2022, the Dutch Parliament adopted a law that introduces a generally applicable foreign direct investment screening regime (the Act). The purpose is to complement the existing sectoral screening regimes in electricity, gas and telecommunication sectors. On December 23, 2022, the Council of Ministers approved a Decree that provides the technical details of the Act, such as the provision of information and data retention periods.
On 1 June 2023, the regime entered into force, following the adoption of a Royal Decree on 4 May 2023 defining the scope of application of the Act in relation to sensitive technologies. In addition to the mandatory notification of investments occurring after 1 June 2023, the Act has a retroactive effect allowing the Authority to order the parties to an acquisition that may pose a risk to national security and that occurred after 8 September 2020, to submit a notification within 8 months following the entry into force of the Act, i.e., 1 June 2023.
Mandatory notification will be required for investments by investors in or acquisitions of target companies that are vital providers, companies active in the field of sensitive technologies or managers of a corporate campus.
An acquisition activity that falls within the scope of the Act cannot take place before the Authority notifies the notifying person that no review decision is required, or before a review decision has been made, as the case may be. The review procedure consists of two phases: an assessment phase and a review phase.
Non-compliance with a prohibition decision results in the acquisition being null and void, and may result in actions to prevent or reverse its adverse effects. Furthermore, if the Authority has imposed that control or significant influence in the target be reduced or terminated, the Authority can dispose of the shares if need be. There is also a possibility to suspend the exercise of any acquired rights by the acquirer. In addition, the Authority may designate one or more persons to replace the board or management of a target company that is a vital provider if there is a suspension of rights and a risk of misuse or failure of the target company.
In cases of gun-jumping, the Authority may impose an administrative fine of up to €870.000 (reviewed annually), or up to 10 percent of the turnover of the acquirer’s group if the maximum amount was not considered as an appropriate punishment. Where an acquisition has taken place prior to the adoption of a decision, or where an acquisition activity has not been notified, an ex officio review decision (or a decision not to review) can be taken by the Authority within eight weeks after it became aware of the closing of the acquisition activity, or after the expiry of the three-month term given to the acquirer to notify the acquisition. Where incorrect or misleading information was provided by the notifying party, and after the expiry of the three-month term given to the acquirer to notify again the acquisition, a new review decision (supplementing or replacing the original decision) may be taken by the Authority.
The author wishes to thank Julien Haverals, International Trainee, Norton Rose Fulbright LLP Brussels for his contribution.
Publikation
It is widely accepted that 2023 was one of the worst years in recent memory for M&A activity.
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