The Dutch government has blocked Kyndryl’s proposed acquisition of cloud services provider Solvinity, citing “potential risks to the public interest”.
At the centre of the decision is Solvinity’s role in storing data used by DigiD, the Netherlands’ citizen identification system.
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In a letter to parliament, State Secretary for Digital Economy Willemijn Aerdts said the country’s investment screening authority had advised that the deal should be stopped.
The government accepted that recommendation and decided to block the takeover, she said.
The decision is notable as it is the first time the Dutch Investment Screening Bureau has prevented a US acquisition since the body was created in 2020.
However, the government did not set out in detail why American ownership was seen as conflicting with the public interest.
In her letter, Aerdts said the Netherlands remained open to foreign technology companies, including those from the US, while maintaining its own screening rules.
“The Netherlands attaches great importance to the presence of foreign technology companies, including explicitly American technology companies, and to their contribution to the Dutch economy and digital infrastructure,” the letter read.
“At the same time, the Netherlands applies an independent investment-screening framework under the Undesirable Control in Telecommunications Act that is aimed solely at protecting the public interest and applies equally to all investors, regardless of their country of origin.”
Kyndryl had announced the proposed acquisition in November.
Responding to the ruling, Kyndryl said it was “extremely disappointed” by the outcome.
“Since announcing the proposed transaction, Kyndryl has consistently engaged in good faith with relevant stakeholders across the Netherlands’ government. “Despite this engagement and our long history of managing mission-critical operations in the Netherlands, the politicisation of this process has overshadowed the clear and important benefits this transaction would have brought to Solvinity’s customers and Dutch citizens.”
