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The Netherlands has been an attractive place of establishment for headquarters of international groups of companies. In recent years, non-Dutch companies such as Fiat Chrysler, Ferrari, Mylan, and Lyondell Basell have chosen a Dutch entity as ultimate parent, whereas their listing venue and business operations are located outside the Netherlands. The popularity of having a Dutch entity as head of the group stems from a variety of factors. These include the favorable tax treatment and its corporate governance regime, which was traditionally protective to boards. Over 85% of shareholdings of Dutch listed entities are held by non-Dutch investors, most notably located in Anglo-American jurisdictions. Boards of Dutch listed companies have seen increasing activity from shareholders and potential buyers over the past decades. In case such activity was unsolicited or even hostile, the boards relied on the Dutch corporate governance system to fend-off any attempt to take control over the company. Recently, Dutch government announced new legislation that freezes any hostile action from shareholders or buyers for a maximum of 250 days. The new bill seems to imply that the system of checks and balances regulating control over Dutch listed companies is shifting further to the advantage of boards and may add an additional hurdle for shareholders to exercise their rights to influence the companies' strategic direction. Time to take stock again!
Henk Arnold Sijnja, is a Corporate M&A partner at DLA Piper in Amsterdam with broad experience in public M&A. He advises his clients, which include listed companies, financial institutions and investors, on all aspects of corporate governance and financial reporting. He is a lecturer at the renowned Erasmus School for Accounting & Assurance (ESAA), where he speaks about directors' liability.
The One-Hour Briefing will cover:
- Brief description of recent cases of shareholders activism and hostile approaches (Unilever / Kraft Heinz and AKZO Nobel / PPG / Elliott)
- The position of the board and its relation to shareholders under Dutch corporate governance
- Discussion of the bill on the introduction of the 250 days cooling-off period
- Looking ahead: Implications for the attractiveness of a Dutch entity as listed parent of international businesses
Program Level: Overview
Intended Audience: In-house counsel, outside attorneys, board members, corporate officers, and other allied financial professionals responsible for corporate governance or working in public M&A
Advanced Preparation: None