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Deal 5: Head of Legal Department at Anchor Group Mihaela Marin on the Merger of Two Shopping Malls in Romania

Deal 5: Head of Legal Department at Anchor Group Mihaela Marin on the Merger of Two Shopping Malls in Romania

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On November 17, 2016, CEELM reported on the merger of two shopping malls in Romania – Bucuresti Mall and Plaza Mall – owned and operated by the real estate and development company Anchor Group. We reached out to Mihaela Marin, the Head of Legal Department at Anchor Group, who agreed to elaborate on the merger.

CEELM: What where the main drivers that led to Anchor Group’s decision to merge the two shopping mall management companies?

M.M: The merger of the companies who owned Plaza Romania Mall and Bucharest Mall was mainly motivated by the following:

a) The implementation of the merger was aimed at eliminating duplication of administrative structures, as well as unifying and simplifying decision-making in the two companies involved. The merger was achieved by implementing a management improvement that became more dynamic and effective with no need for separating the management activity of two different companies;

b) By implementing the merger of the two companies, a unified policy of marketing was ensured, as was an optimal use of human and material resources available, simplified reporting procedures to the authorities, reducing the cost price, etc.;

c) From the economic point of view, the implementation of the merger is expected to increase the efficiency of commercial activities between the two shopping centers, streamlining the time factor in the negotiation and conclusion of commercial contracts regarding ancillary services necessary for the proper functioning of the two centers (e.g., security contracts, service contracts for cleaning, maintenance contracts / equipment maintenance, housing repair contracts, etc.), so it will be possible to better adapt the coordination and monitoring of the specific requirements of each commercial facility.

CEELM: What aspects of the merger were the most challenging for you? 

M.M: Considering that most probably this merger of two shopping centers under one company is among the first such in the Romanian market, for me, as the Coordination Lawyer for Anchor Group, the most challenging aspects of the merger process were the collecting of the internal financial information and the organizing of the transfer of the assets in cooperation with the Notary and the Cadastral Office and Land Registry.

The process also involved a step-by-step coordination of the external lawyers during the Trade Registry and the Competition Council process, as well as the various local authorities’ procedures up until the hearing before the Bucharest Tribunal who approved the merger.     

CEELM: Why did you decide to outsource the legal work if this related to an intra-group merger?

M.M: Generally, for the more complex legal projects, Anchor Group hires outside legal services from among the most reputable law firms in Romanian market.

Also, as already indicated, the complexity of the merger, where two shopping centers, fully rented and ongoing daily operations, are merged into a single company, as well as the multitude of procedures that we need to fulfill starting with the transfer of the assets made with Cadastral Office, the local authorities for transferring the various authorizations and permits, and ending with the procedures before the Trade Registry and Bucharest Tribunal, made us decide that the internal Legal Department, under my coordination, was ensuring the preparing of the internal documentation and supervision of the external law firm during the merger process.

CEELM: Why did you select PeliFilip as your external counsel on this merger? 

M.M: We chose the PeliFilip Law Office based on their experience and reputation in dealing with such complex legal operations such as merger procedures. In addition, since the merger process between our two shopping centers involved various areas of law practice, such as corporate, competition, permits & authorizations, etc., we have benefitted from the expertise and professionalism of the specialized lawyers in the various departments of PeliFilip Law Office.

We are very satisfied with our cooperation with the PeliFilip Law Office.   

CEELM: What were the aspects of the merger that you handled in-house and which ones did you outsource to the firm?

M.M: The matters handled in-house were of course the internal corporate approvals and shareholders’ decisions of the merging companies, the internal inventory of assets and the valuation reports, and the preparing of the financial elements of the merger project.

Our external lawyers assisted us for the more complex procedures of the merger process such as the 2-step procedures of registration with the Trade Registry, the publication in the Official Monitor, obtaining the approval from the Competition Council for the merger, approval from the various authorities involved in the process of transferring the permits and authorization, and the final hearing in front of the Bucharest Tribunal, which approved the merger. 

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