Blockchain: more than just hype
Blockchain is often associated with cryptocurrencies such as Bitcoin, and that is only partly justified. Blockchain technology has a much broader scope. In the world of M&A, blockchain offers a disruptive force that can transform traditional processes. From streamlining due diligence to tokenising ownership certificates, blockchain offers concrete benefits that not only save time and money, but also increase security and transparency.
For M&A professionals, investors and entrepreneurs, blockchain is no longer a futuristic concept, but a strategic tool that can fundamentally change the way transactions are carried out.
Because of the potential of blockchain, we also use this innovative application within La Gro. In 2019, La Gro (Benjamin Niemeijer) was nominated for the Gouden Zandloper (Golden Hourglass) award for the issuance of share certificates via blockchain technology.
What is blockchain and how does it work?
Blockchain is a digital and decentralised ledger, similar to a digital database. Transactions can be recorded on the blockchain in a secure and transparent manner. Each transaction forms a ‘block’ of code. Once a block is full, it is added to a chain of previous blocks. Hence the term ‘blockchain’.
This chain of data blocks is shared and validated by a network of users. This ensures that data cannot be manipulated. This makes blockchain reliable and transparent and offers enormous certainty about the accuracy of the data.
Application of blockchain in M&A
Blockchain has the potential to play an important role in the M&A process, where a lot of time is traditionally spent analysing and verifying data and where certainty about the accuracy of that data is crucial.
Tokenisation: the new era of property transfer
One of the most disruptive applications of blockchain in M&A is tokenisation. Tokenisation is the digitisation of ownership (proofs) (such as shares, real estate or other assets) in the form of tokens on a blockchain. This process offers a level of security and efficiency that traditional methods (such as notarial deeds and shareholder registers) cannot match.
Smart contracts: automation of critical processes
Smart contracts are digital agreements that are automatically executed once predefined conditions are met. In the M&A process, smart contracts can be used for escrow arrangements (the automatic release of funds once certain conditions are met) and earn-out agreements (relevant information for calculating earn-outs can be recorded on the blockchain). Suppose an earn-out depends on the turnover of an acquired company. By recording turnover data on the blockchain, all parties involved have access to the same, immutable data, making manipulation impossible. This provides certainty for all parties, largely prevents discussions about the accuracy of the figures and speeds up the settlement of the earn-out.
Faster and more reliable due diligence
The due diligence process is often one of the most time-consuming parts of an M&A transaction. Blockchain can significantly speed up this process through, among other things, transparency (data is shared via a blockchain-based data room, where all parties have access to the same, immutable information) and reliability (because data on the blockchain cannot be manipulated, buyers and sellers can rely on the accuracy of the information). This means that due diligence is not only faster, but also less prone to errors. For M&A professionals, this means significant savings in time and costs, while improving the quality of the process.
Disruptive value of blockchain for M&A
The application of blockchain in M&A is also relevant and valuable for the following aspects:
- Efficiency and cost savings: the old-fashioned process of maintaining shareholder registers and drawing up deeds of transfer is time-consuming, expensive and prone to human error. A shareholder register can get lost, be incomplete or contain incorrect numbers. Blockchain can eliminate the need for intermediaries such as notaries, drastically reducing transaction costs.
- Reliability, transparency and security: a blockchain-based register is up to date, immutable and, with a good system, always accessible and consultable. This prevents situations in which (shareholder) registers are incomplete or out of date.
- Flexibility: for companies that regularly want to transfer small amounts of (certified) shares (e.g. in the case of employee participation or interests in a fund), blockchain offers a fast and secure solution.
- Decentralisation: no more dependence on central parties such as notaries or banks.
- Immutability: data on the blockchain is permanent and cannot be manipulated.
- Accessibility: blockchain makes it possible to trade ownership and assets worldwide, without the limitations of traditional systems.
- A concrete example: using blockchain technology, share certificates can be transferred within seconds at minimal cost. This makes it easier for start-ups and other companies to attract investors, even for small amounts, because transaction costs are negligible and ownership rights are immediately established.
Blockchain is no longer a hype, but a technology that is ready to transform the world of mergers and acquisitions. From tokenising ownership to automating contracts and accelerating due diligence, the benefits are clear and concrete. For M&A professionals, this means not only a more efficient process, but also a competitive advantage in an increasingly fast-changing market.
Studio M&A La Gro
Do you have questions about the applications of blockchain in M&A? Or would you like to learn more about how this technology can improve your transactions? Then come to our event Studio M&A La Gro on 19 June 2025 and discover how blockchain can transform your M&A processes. Keep an eye on our website and further posts.
