Lessons from Cross-Border Transactions: Dutch Deal Execution in Practice

Cross-border deals usually become difficult at the interfaces

Most cross-border transactions do not become difficult because the parties misunderstand the headline commercial deal.

Friction is more likely to arise where workstreams meet: the principal transaction documents, Dutch corporate law, financing, tax structuring, regulatory requirements, the Dutch notary and the closing process.

That is particularly relevant where an acquisition or investment is led from London, New York or another jurisdiction and a Dutch company forms part of the wider transaction.

This article forms part of Practical Dutch Deal Insights and is the first in a series of observations drawn from recurring patterns across different matters, rather than confidential details of any individual transaction.

Bring Dutch counsel in before the documents are effectively finished

A recurring inefficiency is to involve Dutch counsel once the main documents have already been substantially negotiated.

By then, the commercial agreement may assume mechanics that do not fit neatly with the Dutch corporate structure. Share transfers or issuances, shareholder approvals, board actions, powers of attorney and notarial execution may require a different sequence from the one assumed in the principal documents.

This does not mean turning an international transaction into a Dutch-law exercise.

The better model is for Dutch counsel to work within the transaction already being run by international lead counsel, identify the local points that matter and deal with them without duplicating the wider process. I discuss that approach in Working Alongside US Lead Counsel on Dutch Transactions.

Test international drafting against the Dutch company

Using familiar US or UK precedent makes sense in a cross-border deal. Assuming that the precedent is jurisdiction-neutral does not.

Drafting around share capital, corporate authority, distributions, governance and closing may require Dutch adjustment. The issue is rarely solved merely by changing terminology.

The useful question is whether the agreed commercial arrangement can actually be implemented through the Dutch articles, shareholder arrangements, corporate approvals and notarial documents.

For example, the main SPA may work perfectly well as the principal acquisition agreement while still requiring specific Dutch implementation around the share transfer, authority and closing. See US SPA Templates in Dutch M&A: What Needs to Change?.

The principal documents and the Dutch corporate implementation should ultimately describe the same transaction.

Treat the closing mechanics as part of deal certainty

Closing agendas are sometimes treated as an administrative exercise. In a Dutch cross-border transaction they are part of deal execution.

A Dutch BV share transfer generally requires notarial execution. Share issuances and amendments to the articles can require further notarial actions. Foreign signatories may need powers of attorney. The notary will require KYC and authority documentation.

None of this is unusual. It becomes difficult when first addressed immediately before completion.

Dutch Notarial Mechanics in Cross-Border M&A covers the role of the notary, powers of attorney, KYC, legalisation and execution in more detail.

Where signing and closing do not occur simultaneously, the same discipline should extend to the interim period. Conditions precedent, regulatory approvals, covenants and closing deliverables need to fit the Dutch execution timetable. See Signing-to-Closing Mechanics in Dutch Cross-Border Deals.

The objective is not more process. It is to prevent local implementation from becoming the critical path at the end of the transaction.

Due diligence findings should have a destination

Cross-border diligence can easily become a collection of jurisdictional reports. That is of limited value to the deal team. For Dutch counsel, a material finding should normally lead somewhere. An incomplete share history may need to be fixed before closing. A change-of-control provision may require consent. An IP issue may require remediation or specific protection. Management equity may need to be settled or rolled over.

The legal analysis matters, but so does the transaction response. Can the issue be fixed before signing? Should it be disclosed? Does it justify a condition precedent or specific indemnity? Does it affect price? Or is it a risk the buyer can simply accept?

That approach is described further in How Dutch Legal Due Diligence Differs from US Due Diligence. Local counsel adds most value when the international deal team immediately understands what a Dutch finding means for the transaction.

Keep the Dutch workstream connected to the main negotiation

Another recurring source of friction is fragmentation.

Dutch corporate counsel, international lead counsel, tax advisers, finance counsel and the notary can each be doing their own job correctly while the combined transaction becomes inconsistent.

A tax structure may require one acquisition chain while financing assumes another. The SPA may contemplate a closing sequence that does not align with the notarial execution. A management rollover may be agreed commercially before the Dutch implementation has been considered.

These are not necessarily difficult legal questions. They are coordination problems.

The practical response is to keep a short line between the Dutch workstream and the lawyers running the main deal. If structure, consideration, governance or timing changes, the Dutch implementation should be tested at the same time.

A good Dutch closing should be relatively uneventful

By closing, most Dutch execution questions should already have been answered.

Approvals should be settled. KYC should be complete. Powers of attorney should work. The notary should understand the agreed sequence. Funds flow should match the SPA. Shareholder and director changes should be reflected in the relevant documents.

A broader implementation overview is available in Cross-Border Deal Checklist for Dutch BV Transactions.

When those matters have been coordinated early, the Dutch workstream should not dominate closing. That is usually a sign that it has been handled properly.

Practical conclusion

The Dutch element of a cross-border transaction is usually manageable. The challenge lies in making sure that local corporate law and execution support the wider deal rather than becoming a separate exercise at the end.

The recurring lessons are practical: involve local counsel early enough to influence execution, use international precedent but test it against the Dutch structure, connect diligence findings to transaction decisions and treat notarial and closing mechanics as part of deal certainty.

International lead counsel should not need to manage Dutch implementation themselves. They should be able to rely on Dutch counsel to identify what matters, solve it locally and keep the wider transaction moving.

FAQ

When should Dutch counsel become involved in a cross-border transaction?

Preferably once the Dutch structure and principal transaction mechanics are known, rather than only when the local closing documents need to be prepared.

Can US or UK transaction documents be used in a Dutch deal?

Yes. They can often remain the principal documents, but they should be reviewed for Dutch corporate, governance, approval and closing requirements.

Why can the Dutch notarial process affect timing?

Share transfers and certain other Dutch corporate actions require notarial involvement. KYC, authority documents and powers of attorney therefore need to be incorporated into the timetable.

What should Dutch local counsel report to international lead counsel?

Primarily matters affecting transaction structure, negotiation, timing, closing or post-closing risk, with a clear recommendation on how the issue should be addressed.

Dutch counsel for cross-border transactions

Dirk de Waard is a Dutch corporate, M&A and venture capital lawyer and partner at Venture Lawyers in Amsterdam. He works with international law firms, buyers, investors and deal teams on the Dutch elements of cross-border acquisitions, investments and restructurings.

Dirk can take responsibility for the Dutch workstream — including focused due diligence, Dutch-law input on the principal documents, corporate approvals, governance and coordination with the civil-law notary — while international lead counsel remains in control of the transaction and client relationship.

If a transaction involves a Dutch company and you would like to discuss the local workstream or a specific Dutch execution point, contact dirk.dewaard@viottalaw.com.