The Netherlands blocks Kyndryl's acquisition of Solvinity

The Netherlands banned Kyndryl’s acquisition of Solvinity after an investment review found risks to the public interest under the WOZT. The Investment Assessment Bureau received notification on November 21 and launched an investigation under the Act on Undesirable Control in Telecommunications. After completing the investigation, the bureau recommended a complete ban, which State Secretary Willemijn Aerdts adopted. Solvinity manages DigiD and related government digital services, which are critical to daily state operations. The review was described as country-neutral, risk-based, and proportionate, applying equally to investors regardless of origin. Political opposition emerged quickly after the deal was announced, and concerns were not resolved by Kyndryl.

"State Secretary Willemijn Aerdts of Economic Affairs and Climate Policy (EZK) has banned the acquisition of Solvinity by the American company Kyndryl. The decision was made yesterday (May 25) on the advice of the Investment Assessment Bureau, which identified a risk to the public interest based on the WOZT. The Investment Assessment Bureau (BTI) received a notification of the proposed acquisition on November 21 and immediately launched an investigation based on the Act on Undesirable Control in Telecommunications (WOZT). Upon completion of that investigation, the BTI recommended a complete ban. State Secretary Aerdts adopted that recommendation."

"Solvinity manages DigiD, the Dutch citizens' digital portal connecting them to their tax affairs, subsidies, and much more governmental data. The system is considered critical to the daily operations of the state, and has become a lightning rod as well as wake-up call for the Dutch sense of digital sovereignty. In the letter to Parliament, Aerdts emphasizes that the review is country-neutral, risk-based, and proportionate. The Netherlands attaches great value to the presence of foreign, and specifically American, technology companies and their contribution to the Dutch economy and digital infrastructure, the State Secretary stated."

"According to him, the investment review applies equally to all investors, regardless of origin. The acquisition was announced in November and immediately sparked widespread political opposition. Solvinity manages the infrastructure on which DigiD and MijnOverheid operate, which made the deal particularly sensitive. The government announced early on that it would investigate the implications. Kyndryl subsequently failed to allay these concerns. A debate in the House of Representatives came to nothing."

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