How to navigate public sentiment surrounding the Dutch FDI screening process (Vifo Act)
The Dutch FDI screening act (Vifo Act) has recently entered into force. This new legislation is a response to potential threats to national security that could arise from (international) investments. It specifically targets vital providers, high-tech campus operators, and entities involved in sensitive technologies. The act follows similar international FDI screening protocols and the EU framework.
The current geopolitical landscape is fraught with tension, and companies in these sectors find themselves in the eye of the storm. Transactions are frequently at the heart of intense political and public scrutiny.
So, how can companies successfully navigate the public sentiment surrounding the review process? Not surprisingly, the answer lies in proactive engagement with key stakeholders and clear communication about the core aspects of the transaction as early as possible. By taking the initiative and involving stakeholders such as government authorities, industry experts, local communities, and the media, companies can establish relationships built on trust. Ideally, companies start building such relationships long before the announcement of a particular transaction.
Transparency shouldn't stop at ticking the boxes of disclosure requirements. Each party involved in the deal should communicate their intentions and objectives effectively and highlight their positive track record in similar investments across various markets.
Addressing concerns about access to sensitive intellectual property is paramount. Implementing robust safeguards and emphasizing responsible practices can alleviate potential concerns and showcase the acquirer's commitment to protecting Dutch assets and intellectual capital.
Companies tend to keep their cards close to their chest during a merger not to make the competition and other interested parties any wiser. While a valid concern, such a cautious approach can inadvertently paint a picture of secrecy, suggesting hidden agendas and ulterior motives behind a deal. Once this narrative takes hold, it can quickly escalate out of control and negatively impact the transaction, irrespective of the outcome of the review process.
Taking control of the narrative will be imperative to a successful deal. Neglecting to do so may result in the perception of a transaction as a failure among crucial stakeholders, even before the ink on the deal is dry.?