walslaw, Amsterdam boutique law firm
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Asset deals

An asset deal is an appropriate structure where the acquisition is limited to a defined part of a business, comprising specified assets, contracts and liabilities, with the remainder left behind. It is commonly used for carve-outs, distressed acquisitions and transactions in which the parties seek to leave identified legacy exposure with the seller entity. The legal work at the transfer step is more intensive than on a share deal, since each asset class has its own transfer requirements, contracts may require counterparty consent, employees may transfer by operation of law, and permits may require notification or a new application. We advise on the perimeter, the documentation and the sequencing of execution.

When clients call us

  • You are carving out a business unit from a wider group
  • You want to acquire defined assets without taking on full company history
  • Distress, insolvency or regulator-driven sales are involved
  • Employee, contract and permit transfer needs careful sequencing
  • A hybrid transaction (some shares, some assets) needs structuring

Key legal & commercial issues

I.

When an asset deal makes sense

Asset deals are typical for carve-outs from a wider group, business-unit sales, distressed acquisitions out of administration, and transactions in which the buyer wants to take over only the assets and contracts it values (cherry picking) or seeks to ring-fence environmental, tax or litigation exposure in the seller entity. They are also used where the seller is a partnership or a foundation, so that there are no shares to transfer.

II.

Transfer mechanics, by asset class

  • Contract transfer generally requires the counterparty's cooperation; assignment restrictions and change-of-control clauses must be assessed.
  • Permits and licences are often non-transferable and may require re-application, a timing issue that needs to be planned around.
  • Real estate transfers require a notarial deed and Land Registry registration; real estate transfer tax applies and needs to be planned.
  • IP transfers must comply with the formalities applicable to the relevant right; registered rights should be recorded in the buyer's name where appropriate.
  • IT systems, data and software licences need to be mapped for assignability and migration.
  • Receivables can be assigned under Dutch law subject to formalities and any contractual restrictions.
III.

Employees, transfer of undertaking (artt. 7:662 et seq. DCC)

Where the transaction qualifies as a transfer of undertaking under the Dutch implementation of the EU Acquired Rights Directive, employees transfer automatically to the buyer on existing terms and conditions. Pension provisions, harmonisation issues and works council involvement all need to be assessed and planned in good time.

What we advise on

What we advise on

  • Carve-out structuring and perimeter definition
  • Asset purchase agreement and ancillary transfer documents
  • Real estate, IP, IT and contract transfer mechanics
  • Transfer of undertaking analysis and employee communications
  • Permit and licence assignability, re-application strategy
  • Distressed asset deals and pre-pack scenarios
  • Transitional services agreements for stranded functions
  • Closing logistics across multiple registries and counterparties

Typical documents and deliverables

Typical documents and deliverables

  • Asset purchase agreement (APA)
  • Transfer documentation for real estate and registered IP
  • Contract assignment / novation agreements
  • Employee information letters and works council documentation
  • Schedules of assets, liabilities and contracts in scope
  • Transitional services agreement
  • Deeds of transfer and other transfer documents

How we support the process

How we support the process

  1. 1

    Perimeter definition settling which assets come across and which liabilities stay behind

  2. 2

    A consent, registration and employee analysis covering every asset class inside the perimeter

  3. 3

    Drafting of the asset purchase agreement and of each transfer instrument it requires

  4. 4

    Coordination of the notary, the registries and the counterparty consents that gate completion

  5. 5

    Closing and the transitional arrangements that keep the business running while consents arrive

Questions clients ask before instructing us

Questions clients ask before instructing us

What is the main difference between a share deal and an asset deal?
A share deal transfers the shares in a company, whereas an asset deal transfers selected assets and, where agreed and legally effective, liabilities out of it. That distinction drives the transfer mechanics. In a share deal, the company remains party to its contracts, permits, employment relationships and liabilities. In an asset deal, the buyer chooses the perimeter, but each asset class transfers under its own rules: real estate by notarial deed, receivables by assignment (disclosed or undisclosed), contracts by contract transfer with counterparty cooperation, and IP under the rules applicable to the particular right. Employees assigned to a transferring undertaking pass automatically where the statutory requirements for a transfer of undertaking are met. Asset deals may provide greater scope to define the liabilities assumed, but demand more individual transfer steps.
Do employees automatically transfer on a Dutch asset deal?
If what transfers is an economic entity that retains its identity, they do. Under the transfer of undertaking rules (art. 7:662 et seq. DCC), which implement the Acquired Rights Directive, employees assigned to the transferring undertaking pass to the buyer automatically, on their existing terms, with continuity of service. The parties cannot contract out of this, they cannot select which employees come across, and dismissal because of the transfer itself is not permitted. The transferor and transferee remain jointly liable for pre-transfer obligations for a period after the transfer. Pension arrangements follow a separate and more technical regime. The practical questions are which employees are assigned to the business, what the harmonisation plan is afterwards, and how the works council consultation is sequenced.
Can we transfer Dutch contracts without the counterparty's consent?
Generally, contracts cannot be transferred without consent. Contract transfer requires the counterparty's cooperation. Receivables can in principle be assigned without consent, subject to any legally effective contractual assignment prohibition. Obligations cannot be transferred that way. This is often the central execution risk in an asset deal, since a business with 400 customer contracts cannot practically obtain 400 consents before closing. The workable answers are to prioritise the contracts that actually carry value, to use a transitional arrangement where the seller holds non-transferred contracts for the buyer's account until consent arrives, and to price the residual risk. We aim to identify assignment and change-of-control clauses in the first week of due diligence.
How does Dutch real estate transfer tax apply to asset deals?
Dutch real estate transfer tax applies directly. If Dutch real estate is inside the perimeter, transfer tax is due on the acquisition of legal or economic ownership, at a rate that depends on the type of property. There are exemptions, including for transfers in the context of business reorganisations and internal restructurings, but they are conditional and need to be assessed in advance. Where property represents a material share of the value, transfer tax often determines whether the transaction is structured as an asset deal at all, or whether the property is left behind and leased back.
What happens to permits and licences in an asset deal?
The treatment of permits depends on the statutory regime and the permit conditions. An environmental permit under the Environment and Planning Act generally follows the activity, although the permit holder must notify the competent authority in advance. Sector permits, such as DNB or AFM authorisations, healthcare permits and waste permits, may require regulator approval or a new application, which can set the timetable. We therefore map the permits in the first due diligence pass and build the longest lead time into the plan.
Is an asset deal faster or slower than a share deal?
Whether an asset deal takes longer than a share deal depends on the assets and liabilities within the perimeter and on the required transfer steps. An asset deal may require separate transfers, counterparty consents, employee information and consultation, permit-related steps and transitional arrangements. The reason to accept that additional complexity is the ability to define the assets and liabilities acquired and to leave other exposure with the seller.

Related areas

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