Fri, Feb 17, 2017 - Page 10 News List

Netherlands proposes law to stop telecom takeovers

Reuters, AMSTERDAM

The Dutch government yesterday proposed legislation that would give it power to block or undo mergers in the telecommunications sector.

The Netherlands is gearing up for a national election on March 15 in which the ruling conservative VVD party is facing a strong challenge from the far-right nationalist Party for Freedom of Geert Wilders.

In a statement, the Dutch Ministry of Economic Affairs said telecommunications, including data hosting centers and other Internet infrastructure, was vital to national security and the law was permissible under EU rules.

“The Netherlands profits from the fact that we have an open economy,” Dutch Minister of Economic Affairs Henk Kamp said in a statement. “We take over more companies abroad than vice versa.”

However, the minister said “our country is not helped by takeovers by foreign companies that are linked to criminal activities, that are financially weak or that have a non-transparent ownership structure.”

He said the new law was needed to give a legal basis to prevent such takeovers.

Separately, Kamp said the government was seeking further powers over the national mail company, including insuring it remains headquartered in the Netherlands and makes sufficient infrastructure investments.

Last month, PostNL NV rejected a takeover offer from Belgian rival Bpost SA under pressure from the Dutch government.

Attempts by America Movil SAB, owned by Mexican tycoon Carlos Slim, to take over Dutch telecom KPN NV in 2013 foundered as the company took poison pill measures to prevent it.

In 2015, Britain’s NCC Group bought Dutch cybersecurity firm Fox-IT, which is responsible for securing Dutch government communications, for 133 million euros (US$141.5 million).

Now that Britain has voted to leave the EU, a Dutch newspaper reported the government has sought to have parts of Fox-IT’s business ring-fenced in a division called Fox Crypto that the Dutch government would exert considerable control over.

Those controls would include a veto right on board appointments and right of first refusal to purchase it if it was put up for sale.

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