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, the Dutch Minister of Economic Affairs is considering how 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
Although the ACM’s clearance decision on Foresco is yet to be published, the press release already 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 also take into account the effects of all previous acquisitions (including those that have not been notified), and the effects of future acquisitions that are sufficiently likely to occur. As a result, the individual acquisition will be placed within a broader pattern of serial acquisitions to identify potential competition concerns. 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 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 this 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. The Dutch Minister of Economic Affairs is considering options in response to the ACM's call to plug this gap (see our December 2024 newsletter).
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 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.
