Netherlands Blocks US Tech Acquisition

The Dutch government has blocked US-based Kyndryl's bid for Solvinity, a key IT provider, citing national security and digital sovereignty concerns.

The Dutch government has intervened to block the acquisition of Solvinity, a Dutch IT services company, by the US-based IT giant Kyndryl. The deal, originally announced in November, would have given Kyndryl control over a provider of secure managed cloud services in the Netherlands. Solvinity is notably responsible for critical infrastructure, including the DigiD authentication application used by Dutch citizens to access government services. The government's decision to block the acquisition stems from concerns over national security and the potential risks associated with foreign ownership of essential digital systems.

This decision is a significant signal of the growing trend of "digital sovereignty" in Europe, where governments are increasingly scrutinizing and intervening in technology deals to protect national interests. For founders, CTOs, and security leaders, it underscores the rising geopolitical risks in tech mergers and acquisitions. The blocking of a major player like Kyndryl sets a precedent, suggesting that future cross-border deals involving critical infrastructure will face intense regulatory examination. Companies looking to expand in Europe must now factor in the possibility of government intervention, especially when acquiring assets tied to national security or public services.