ACM rolls the dice on roll-up strategies
For the first time, the Dutch Authority for Consumers and Markets (ACM) has cleared an acquisition based on a ‘roll-up strategy’ assessment. The outcome of another roll-up strategy merger assessment is pending. Meanwhile, a legislative proposal has been published to fill the gap in the ACM’s powers to assess roll-up strategies. Companies will have to wait and see how the dice roll when considering serial acquisitions.
Background
Roll-up strategies – serial acquisitions of small companies by a single acquirer – generally escape the ACM’s scrutiny for potential competitive harm: the individual acquisitions are usually too small to meet the notification thresholds. However, these two roll-up strategy acquisitions came within the ACM’s reach because, in each case, the last serial acquisition triggered the thresholds required for notification to the ACM.
On 20 February 2025, after an in-depth (Phase 2) investigation, the ACM cleared the acquisition of wooden pallet sellers DWP and Vierhouten by competitor Foresco. The ACM had launched an in-depth investigation as Foresco had become a ‘market leader’ due to a series of small acquisitions made over the years that had escaped the ACM’s scrutiny because they did not trigger the notification thresholds.
Similarly, the ACM has launched a Phase 2 investigation into the acquisition of Delta’s fiber-optic networks by Dutch telecom operator KPN’s joint venture Glaspoort because of a potential roll-up strategy. According to the ACM, KPN had acquired at least seven fiber-optic networks from smaller competitors since 2010 that fell below the notification thresholds.
Rolling the dice on roll-up strategies
The ACM’s clearance decision regarding the DWP/Vierhouten acquisition clarifies the ACM’s approach to roll-up strategies in its merger reviews. In addition to assessing the specific impact of the individual acquisition under review, the ACM will place the acquisition within a broader pattern of serial acquisitions to identify potential competition concerns.
For instance, to assess whether a subsequent acquisition will strengthen a dominant company’s dominance, the ACM will take account of the dominant company’s roll-up strategy and the effects of past acquisitions that may not have fully materialised due to their recent nature. Moreover, other sufficiently concrete future acquisitions that are part of the roll-up strategy will be factored into the ACM’s assessment of the acquiring company’s current market position to determine whether an individual acquisition within this roll-up strategy may reinforce the creation of a dominant position in the future. The ACM will also include the effects of recent past acquisitions that have not yet fully materialised in this assessment.
Companies should therefore be aware that internal documents, in particular those relating to serial acquisitions, will be of interest to the ACM in this review. The ACM will also take account of the acquirer’s historical growth in market share and market position as a result of previous acquisitions. A reduced number of alternatives, the expected growth from anticipated future acquisitions, and the extent to which competitors are or may become active and successful in making acquisitions will also be considered. Moreover, the adverse effects on customers resulting from past acquisitions may be taken into account.
The ACM cleared the DWP/Vierhouten acquisition. There were insufficient indications that Foresco’s serial acquisitions had had any negative effects, and that Foresco would continue with its roll-up strategy. It remains to be seen how the dice will roll on the intended acquisition of Delta by KPN’s joint venture Glaspoort. Whatever the outcome, the decision will shed even more light on the ACM’s approach to serial acquisitions.
Plugging the gap
The ACM used both cases to emphasise its need for powers to “call in” non-notifiable acquisitions in order to tackle their potential competitive harm (see our December 2024 newsletter). The ACM’s call to plug this gap may soon be answered. In March 2025, a legislative proposal was published for consultation that would grant the ACM the power to call in non-notifiable concentrations for review up to six months after the agreement effecting the concentration comes into force.
Meanwhile, the ACM will launch market investigations into some of the sectors, such as veterinary practices, that it earlier flagged as prone to serial acquisitions. Irrespective of whether (or when) the ACM will gain a call-in power or a new competition tool, companies active in these sectors should bear in mind that they have the ACM’s attention (see our February 2025 newsletter).
Conclusion
There is more clarity on how serial acquisitions fit into the ACM’s current merger review. Further guidance (and possibly more tools) are yet to come. For now, companies involved in serial acquisitions should be mindful of the ACM’s approach and carefully review their internal documentation regarding roll-up strategies.
