In relation to the current pandemic, how would you characterise how Dutch law firms have reacted to continuing to support clients. For example, have firms stepped up in order to provide tech solutions to facilitate court and other hearings or the ease with which clients can track developments/costs?
Dutch law firms, civil law notaries and the courts have made an effort to accommodate (international) transactions, legal proceedings and other legal advice during the pandemic. Examples are online court hearings, online verification of documentation and digital execution of agreements.
To what extent has Brexit affected levels of work as both Dutch and other companies and investors plan for their future businesses and investments?
To date, Brexit has not affected the deal flow at our firm. Though the UK’s withdrawal from the EU does not make future investments from the UK in the Netherlands or vice versa easier, I am confident that we will find the solutions to make these plans for future businesses and investments work for both sides of the North Sea.
To what extent, if any, has the M&A market changed in the past year – in terms of flow or size of deals and the makeup of domestic and international clients?
Judging from the league tables, after a solid Q1, the COVID-19 crisis had a significant impact on the flow and size of deals in the Netherlands during Q2 2020. Though the midmarket deals recovered rather quickly, league tables indicate that the total deal value over 2020 was significantly lower than 2019. For our firm, the makeup of domestic and international clients has remained steady across the board even during 2020.
Looking to the future, what areas of commercial activity do you see being at the fore? Are areas such as green investments, alternative forms of energy and automation some of such areas?
Despite COVID-19 and current economic uncertainties, many dealmakers see increasing opportunities for completing deals in 2021, including in particular renewable investments, digitization (IT) and healthcare. It goes without saying that the pandemic will continue to have an influence on the deal market over this year, but there is a certain level of optimism among dealmakers that its impact on M&A transactions will wane over time.
How is the Dutch nitrogen emissions crisis affecting the construction and agricultural sectors, and what knock-on effects are there for other industries?
In May 2019, the Dutch Council of State ruled that government rules for granting construction permits and farming activities that emit large amounts of nitrogen breach EU legislation. It is reported that up to 18,000 infrastructure and construction projects have been stalled as a result, including the opening of Lelystad Airport. With the resignation of cabinet Rutte III on 15 January 2021 and elections to be held mid March 2021, the knock-on effects for 2021 and for other industries will very much depend on the plans to be implemented by the new government to effectively comply with EU legislation in this respect.
As with many countries, The Netherlands seems to be struggling to meet its climate change commitments. What solutions do you see to this issue in terms of policy and technology?
Unfortunately, the Netherlands are lagging behind on its climate goals. We will need to take further action in order to meet climate change commitments or even more ambitious climate change goals. I believe our next government will need to seriously consider shutting down several coal-fired energy plants in the Netherlands and an action plan for energy saving measures such as improving home insulation. Several political parties have also proposed nuclear energy as means to meet climate change goals. Any new policies will very much depend upon the outcome of the March general elections.
When the government COVID-19 support and recovery package comes to an end next year, what will be the implications for businesses and employees? Do you expect a mass upturn in unemployment and insolvencies?
According to Statistics Netherlands (CBS) the total number of businesses and institutions filing for bankruptcy in 2020 stood at the lowest level in 20 years. The number of bankruptcies dropped in almost every sector. Meanwhile, unemployment rose in the first three quarters of 2020 from an average 3.4 to 3.8 percent of the labour force (according to CBS). The fact that fewer companies were declared bankrupt in times of coronavirus cannot be seen in isolation from the government COVID-19 support and recovery packages. The Dutch government also introduced legislation to prevent companies that are in distress as a result of the pandemic from going bankrupt, limiting enforcement by creditors. It is fair to expect an upturn in unemployment rate and insolvencies when these support measures expire. Interestingly, the new Dutch Court Confirmation of Extrajudicial Restructuring Plans (“Wet Homologatie Onderhands Akkoord”) came into force on 1 January 2021 introducing a pre-insolvency restructuring mechanism in the Netherlands.
Which sector do you see as the next growth area for investors?
During the COVID-19 crisis, sectors that have seen tremendous growth are IT and healthcare. I expect these sectors, as well as the renewable energy sector, to continue doing well in 2021. Other sectors in the Netherlands seem to face a period of unprecedented opportunities and challenges ahead. The experience of previous economic downturns has been that the return of confidence could spark a wave of innovation and unleash a consumer rebound. Our firm is ready and able to assist our clients in getting their deals done even in these challenging times ahead of us!