The Dutch government has blocked Kyndryl’s planned acquisition of Solvinity over public interest and data sovereignty concerns. This signals potential hurdles for U.S.-based IT service providers pursuing European deals amid rising geopolitical tensions and scrutiny of foreign technology ownership.



Kyndryl’s move to acquire a Netherlands-based solution provider with ties to that country’s national ID system has been blocked in a move that could make it harder for U.S.-based IT companies to acquire European companies.

New York-based Kyndryl, a global enterprise IT services provider ranked No. 13 on the CRN 2026 Solution Provider 500, in November entered into an agreement to acquire Solvinity Group, which provides secure managed cloud platforms and services in the Netherlands. That deal was valued at about 100 million euros, or about $115 million.

Solvinity is currently the IT solution provider in charge of enhancing DigiD, the official on-line identification used in the Netherlands for citizens looking to access services on-line. Solvinity has a contract to work on DigiD through August of 2028, but the government is in the process of extending that another two years.

[Related: Kyndryl Aims New Quantum Safe Assessment At Future Security Risks]

Kyndryl’s plan to acquire Solvinity, which would not have included ownership of DigiD, was subject to review by the Dutch government which in May announced that it would block the acquisition via a letter to the country’s parliament.

That statement, written in Dutch but translated via Google, said the country’s Investment Assessment Office, or BTI, which is the supervisory authority under the Telecommunications Undesirable Control Act (WOZT), concluded that the intended acquisition of Solvinity may pose a risk to the public interest and advised a complete prohibition of the acquisition.

It was the first time the Dutch government’s investment screening agency rejected a U.S. takeover, Reuters reported.

In response, Kyndryl on May 26 wrote in a statement on its website that it is extremely disappointed by the Netherlands’ government decision to prohibit Kyndryl’s acquisition of Solvinity.

“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 politicization of this process has overshadowed the clear and important benefits this transaction would have brought to Solvinity’s customers and Dutch citizens.

“Notwithstanding this outcome, our team will continue to support our customers in the Netherlands as they modernize legacy systems, keep pace with rapid advances in technology and do so securely and at scale. We will continue to bring our proprietary agentic AI methodologies to regulated and non-regulated customers across the Netherlands. Our team will, as they always have, operate with trust and dedication to the highest standards of mission-critical services, security, compliance, data protection and innovation.”

Kyndryl declined a CRN request for more information.

An IT channel source, who requested anonymity, wondered why the Dutch government would reject Kyndryl’s proposed acquisition of Solvinity. The source noted that Kyndryl already works with several government customers in Europe, including the Dutch Ministry of Defense. The value of Kyndryl’s Dutch military contract is worth about 4 billion euros, or $4.6 billion, according to the New York Times, Furthermore, the source said, Solvinity is currently owned by the British-based private equity firm Vitruvian Partners.

Geopolitical Tensions

The rejection of Kyndryl’s plan to acquire Solvinity comes at a time when geopolitical issues, particularly since the start of Donald Trump’s second term as President of the U.S., are increasingly impacting foreign relations.

Certain policy positions of the U.S., including a push by the Trump administration to take control of Greenland from Denmark and Trump’s criticisms of Europe and NATO have in the last year strained relationships with European nations, including the Netherlands, which has traditionally been a close ally of the U.S.

At the same time, European countries have increasingly expressed concerns about reliance on U.S. technology, particularly when it comes to cloud technology. Reuters, for instance, reported on June 1 that 13 European cloud providers are working with European lawmakers and non-government organizations to back the European Commission’s push to reduce Europe’s dependence on U.S. technologies.

At the same time, European nations are concerned about data sovereignty, particularly in the face of the U.S. CLOUD (Clarifying Lawful Overseas Use of Data) Act of 2018 which allows the U.S. government to demand access to data stored in foreign data centers. The CLOUD Act has stirred concerns in Europe, which has stronger data privacy laws than the U.S.

U.S. Response

The U.S. Embassy and Consulate General in the Netherlands, in a statement, said the U.S. and the Netherlands share one of the world’s strongest and most enduring partnerships, built on 250 years of shared values, innovation, and cooperation.

“We were disappointed by the Dutch government’s decision regarding the Kyndryl-Solvinity deal. We understand and respect the responsibility to safeguard critical infrastructure and protect citizens’ data. While we believe additional time for dialogue should have allowed for the identification of a path that would address legitimate concerns, we are committed to working closely with Dutch partners to protect both nations’ interests going forward.

“Our economic and technological partnership is a story of co-creation and mutual reliance, delivering real benefits on both sides of the Atlantic. Strong partnerships require rules of the road that are clear, fair, and reciprocal. They create an environment that attracts U.S. investments rather than turning them away. Our partnership will continue to thrive, but it is essential that we maintain our mutual commitment to shared prosperity and security,” the statement read.

The channel source said the rejection of the planned acquisition is 100 percent based on the fact that Kyndryl is headquartered in the U.S. The action by the Netherlands government could also be a sign of things to come for other U.S.-based solution providers looking to make acquisitions in Europe, they said.

Kyndryl’s planned acquisition of Solvinity would have been only the second acquisition for Kyndryl since it acquired hybrid cloud services provider Skytap.

David Harris assisted with this story.