Taking over customer base in business takeovers

In the event of a merger or acquisition, the customer base is also valuable. For a buyer, acquiring the customer base is attractive and particularly valuable. Acquiring the customer base during a company takeover ensures that the value of accumulated goodwill is retained. This makes the new start a lot easier. However, there are laws and regulations in force that the buyer must take into account when acquiring a company’s customer base.

Advantages of acquiring a customer base

By acquiring the customer base when purchasing a company, contacts with existing customers are retained. This gives the buyer an immediate overview of contacts that can be approached for sales. This means that turnover can be generated quickly and easily. In addition, the new owner also benefits from the good brand awareness built up by the acquired company.

Customer database acquisition: legislation and regulations

Nowadays, strict legislation and regulations apply to the processing of personal data from the customer database. The GDPR has been in force since 2018. The acquisition of a customer database is assessed by the GDPR as “further processing of personal data”. And every processing operation must be lawful.

What are the risks associated with acquiring a customer database without legal compliance?

Acquiring a customer database without legal compliance can pose significant risks, particularly in the area of privacy legislation. According to the GDPR (General Data Protection Regulation), personal data may only be transferred if there is a valid basis for doing so. Without that basis, you run the risk of complaints, fines from the Data Protection Authority and reputational damage. Contractual obligations with customers or third parties may also be at stake. Our advice is therefore to have an expert assess in advance whether the transfer is legally permitted. Draw up a processing agreement where necessary and communicate transparently with the customers involved. This will help you avoid legal problems and maintain trust.

Data processing in the AVG

The correct processing of personal data when acquiring a customer database is the responsibility of the selling party. This is considered “further processing of personal data”. Article 6 of the GDPR lists various grounds for the lawful processing of personal data. The grounds that may apply in the case of a company takeover and the transfer of a customer database are known as consent and legitimate interest, as in the former Personal Data Protection Act.

Requirements for customer database transfers under the GDPR

In theory, a selling party can ask customers for permission to transfer data prior to a possible merger or acquisition. In this situation, this is done by means of a privacy statement. In practice, however, asking for this permission causes the necessary “unrest” or confusion among existing customers. Moreover, the GDPR imposes strict requirements and conditions for obtaining this permission when acquiring a customer database.

Legitimate interest

First and foremost, in order to obtain consent for the transfer of a customer database in the event of a company takeover, there must be a legitimate interest. In the event of a takeover – and certainly when this concerns the takeover of the customer database – a buyer can invoke this in many situations. The most important condition for obtaining legitimate interest is that the (commercial) interest of the buyer outweighs the privacy interests of the parties concerned. However, additional requirements apply, such as informing the parties concerned about the acquisition, and retention periods must be strictly adhered to.

Valuable legal advice on company acquisitions

The acquisition of the customer base in the event of a company acquisition, merger or bankruptcy is by no means always a foregone conclusion. In addition, the selling party is expected to inform existing customers in a proper and transparent manner about a possible sale of the company. The corporate law solicitors at Fruytier Lawyers in Business specialise in privacy legislation in the context of mergers and acquisitions. They are happy to assist you with targeted and committed legal advice on acquisition processes and privacy legislation.