Kyndryl said the ‘politicisation’ of the deal has ‘overshadowed’ potential benefits it could have provided to Dutch citizens.

The government of the Netherlands has blocked Kyndryl’s proposed acquisition of Dutch cloud provider Solvinity, citing a risk to public interest.

Solvinity stores data used by the country’s citizen identification tool DigiD. The company’s tools are also used by public institutions including the tax office and universities. The acquisition would have reportedly set Kyndryl back €100m.

“The [Dutch] Investment Screening Bureau (ISB) advised me to proceed with a complete prohibition of this acquisition. I have made this advice my own and have adopted it,” said Willemijn Aerdts, the country’s minister for the digital economy and sovereignty, in a translated letter to parliament.

“The Netherlands attaches great value to the presence of foreign, including explicitly American, technology companies and their contribution to the Dutch economy and digital infrastructure,” the minister added, though she did not explain why the acquisition would risk public interest.

This is the first time the ISB has blocked a US acquisition since it was set up in 2020.

Several members of the Dutch parliament had openly criticised Solvinity’s acquisition by a US IT company over concerns that the US government could access private European citizen data.

“We are extremely disappointed by the Netherlands’ government decision to prohibit Kyndryl’s acquisition of Solvinity,” said Kyndryl in a statement.

“Since announcing the proposed transaction, Kyndryl has consistently engaged in good faith with relevant stakeholders across the Netherlands’ government.

“Despite this engagement and our long history of managing mission-critical operations in the Netherlands, the politicisation of this process has overshadowed the clear and important benefits this transaction would have brought to Solvinity’s customers and Dutch citizens”.

Kyndryl announced the proposed acquisition last November, stating that the deal would enable it to offer customers expanded services in “modernising, innovating and securing sensitive and complex workloads”.

Meanwhile, last September, the Dutch government began seizing Chinese-owned chipmaker Nexperia, citing a “threat” to Europe’s semiconductor capabilities.

The back-and-forth led to China temporarily halting Nexperia chip exports in early October. However, a Dutch court later upheld the seizure decision, as well as a decision to suspend the company’s Chinese CEO and hand control off to EU-based directors.

The dispute, triggered by the Dutch government, led to parent company Wingtech suing its subsidiary Nexperia earlier this month, arguing that the government’s actions resulted in billions in losses. The company is demanding €1bn in damages.

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