Industrial manufacturing: how shareholders get out
A shareholder in a Dutch industrial manufacturing company exits either by selling the shares in the holding entity or by having the company sell its assets, but in this sector the route is shaped by three recurring features: a factory site often held apart from the operating company, mandatory affiliation to a sector pension fund that does not release on request, and a works council with an advisory right on the transaction itself. Missing any one of the three delays completion or resets the price after signing.
Why this arises here
Industrial manufacturers typically hold plant, machinery and, in many groups, the factory site itself. Financing is a mix of bank facilities secured by a right of pledge over inventory and equipment, and lease or sale-and-leaseback arrangements for the larger installations. It is common for the operating company to lease its site from a separate property-holding company within the same group, a split usually driven by financing and liability separation rather than by tax planning alone.
That split has a direct consequence for exit. A share sale carries the operating company as it stands, including its permits and its lease, but the real estate stays where it is unless the parties agree separately to move it. An asset sale does the opposite: it moves whatever assets are named, and nothing else, so the site, the permit and the pension arrangement all need their own line in the agreement. Questions of corporate law and governance in this sector are, in practice, questions about which entity holds what.
The mechanics in short
A share sale transfers the Dutch private limited company (besloten vennootschap, BV) by notarial deed executed before a civil-law notary. The asset base does not move, and supplier, customs and permit arrangements continue under the same legal person. An asset sale requires each asset, each permit and each material contract to be identified and transferred one by one, and any machinery still subject to a supplier's retention of title (eigendomsvoorbehoud) or the bank's pledge must be cleared, or the pledgee's consent obtained, before it passes with clean title.
Either route needs board approval under the company's articles and, in most manufacturing groups, prior advice from the works council (ondernemingsraad) on a decision that changes control of the enterprise, sought before the transaction is signed rather than after. A board that signs before receiving that advice risks an internal challenge at the Enterprise Chamber, a Dutch court that hears governance disputes, though the sale itself generally remains valid towards the buyer. Practical closing therefore separates signing from completion, running the pledge release, the property lease and the works council advice period in parallel.
The pattern specific to this sector
Three patterns are specific to industrial manufacturing under Dutch law and would not arise in a services or software exit.
First, most manufacturers are mandatorily affiliated to a sector pension fund (bedrijfstakpensioenfonds) covering the metal, technology or process industries. That affiliation runs with the employer, not with the shares: a share sale changes nothing for the fund, but an asset sale that moves employees to a new employer triggers a fresh affiliation decision, and the fund does not release historic liabilities on request.
Second, the factory site typically carries a site permit and a soil or groundwater condition report. On a share sale the permit holder does not change and historic soil liability stays with the same legal entity. On an asset sale, or where the property company is sold separately from the operating company, the permit and the environmental liability have to be dealt with as a negotiated item, not assumed to follow the keys. This is the same underlying issue that surfaces, in a different form, in group structures built around leased depots and vehicle fleets.
Third, a manufacturing site above a modest headcount runs a works council with an advisory right on any decision that changes control of the enterprise, its ownership or its location. In lighter sectors this right is sometimes treated as a formality. In manufacturing, where the workforce often represents the majority of enterprise value on the balance sheet, the advice process is where price and headcount protections actually get negotiated, before the deal is signed rather than after. A comparable but differently weighted set of considerations arises in life sciences exits, where regulatory approval rather than headcount tends to set the timeline.
What to check before you agree a structure
Check four things before the term sheet, not after signing. Which entity holds the site permit, and whether the soil report is current. Whether machinery on the balance sheet carries a supplier's retention of title or a bank pledge, and what release each requires. Whether the target is affiliated to a sector pension fund and what the chosen route does to that affiliation. Whether the works council's advisory right has been triggered and on what timeline. A structure report maps the holding chain, the security interests registered against the company and its assets, and the permits tied to the operating entity, so these four items are confirmed early rather than discovered during due diligence. The same mapping is useful before an ordinary distribution decision, as set out for a structure check run ahead of a dividend.
Route against what moves
| Route | What moves automatically | What needs separate action | Typical friction point |
|---|---|---|---|
| Share sale | Shares, permits, pension affiliation, real estate if held in the same entity | Nothing, unless permit conditions require notification | Works council advice must run before signing |
| Asset sale | Only the named assets | Permits, employee transfers, pension re-affiliation, release of pledges and retention-of-title claims | Machinery still covered by a supplier's retention of title |
| Property carve-out before sale | Operating company only | Lease terms and allocation of environmental liability between operating company and property company | Soil condition report and historic contamination liability |
What this does not cover
This page does not cover the employment-law consequences of a transfer of undertaking for staff, which depend on the route chosen and the headcount involved. It does not cover competition clearance for the buyer, which is assessed on turnover and is a separate question from the exit route itself. It does not cover the tax treatment of the sale, which depends on the structure and the seller's own position. It does not address the position of a shareholder who is staying in, which is a governance question rather than an exit question, and it does not resolve a dispute over the price itself: for a board already facing a liability question on the accounts side, the objections available are covered separately under late-filing liability and its objections.
Questions
Does a share sale avoid the sector pension fund issue in industrial manufacturing?
Largely yes, because affiliation to the sector fund runs with the employer entity, and a share sale leaves that entity in place. Confirm the specific fund's own rules before relying on this, since some funds attach conditions to a change of ultimate ownership even where the employer itself does not change.
Who holds the site permit if the real estate sits in a separate property company?
The permit is generally held by whichever entity is registered as the operator of the installation, which in a typical operating-company-and-property-company split is the operating company, not the entity that owns the building. Confirm the registration before assuming either way.
Does a negative works council advice stop the sale?
No. The board can proceed against a negative advice, but it must state its reasons and observe a further waiting period before implementation, and proceeding without doing so exposes the decision to an internal challenge at the Enterprise Chamber. The sale itself, once signed, generally remains valid towards the buyer.
About the author
Eva Kuipers advises boards and shareholders on governance disputes and exit routes within Dutch corporate groups, including matters that reach the Enterprise Chamber. Her work in this area concerns the internal steps that have to be taken correctly before a transaction is signed.
For a structuring question that sits in the Netherlands more broadly, see the corporate practice and the wider corporate mandates this firm handles.
Last legal review: 2026-09-25