Dutch government blocks Kyndryl acquisition of Solvinity

The Dutch government has blocked American IT giant Kyndryl from acquiring Solvinity, a Dutch cloud provider. The government officially intervened to stop the transaction, stating that the proposed deal poses a possible “risk to the public interest.”

The transaction would have allowed Kyndryl to buy Solvinity for an undisclosed sum. However, the acquisition triggered concerns because Solvinity hosts DigiD, the Dutch online identity platform. DigiD is a service managed by the Dutch government that allows residents of the Netherlands to verify their identity when accessing various public services. Under the proposed acquisition, DigiD data would fall under foreign control and could be demanded by US authorities.

Willemijn Aerdts, the Dutch minister for the digital economy, published a letter on Monday announcing the decision. In the letter, Aerdts confirmed that the government has imposed a “complete prohibition” on the acquisition. Politico first reported the news of the blocked transaction. Following the announcement, Kyndryl told the publication that the company was “extremely disappointed” by the decision.

Although the Dutch government did not provide an explicit reason for blocking the acquisition, the move comes as several European countries are moving to reduce their reliance on US technology giants. Under US law, government authorities—including law enforcement and intelligence agencies—are permitted to demand that American companies turn over data held in overseas data centers, regardless of the data protection laws of the country where the data is stored. This legal framework has raised European concerns over extraterritorial data demands and the security of national digital infrastructure.

Why it matters

This move highlights the growing friction between European data sovereignty and US extraterritorial data laws, signaling that national identity infrastructure is increasingly off-limits for foreign acquisition.