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The Buzz in Hungary: Interview with Anthony O’Connor of Kinstellar

The Buzz in Hungary: Interview with Anthony O’Connor of Kinstellar

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“Right now, there is a bit of press around Hungary, for a variety of reasons,” says Kinstellar Partner Anthony O’Connor. “Some of that is related to the perceived tension between Hungary and the EU and the fact that the EU seems to be trying to tie certain expectations it has of Hungary to the funding it is due to receive.” 

The EU, facing political opposition from Poland and Hungary around the stimulus package aimed at providing pandemic relief to the member states, is still considering various political options to solve the recent deadlock emerging from the situation. O’Connor, however, believes that this can be de-coupled from foreign investors’ appetite for Hungarian M&A opportunities. “To a large extent, there is a seeming friction which is currently receiving press coverage – it has not, for now, reduced the appetite of investors for deal-making in Hungary.” 

What can have a more practical effect on deals and investment activity, he says, is the existence of some of the measures put in place earlier in the year. “When the pandemic started, the government passed laws calling for screening of certain types of investments from certain types of investors or in some particular sectors,” O’Connor reports. “These measures have continued and, while they have yet to block any deals, they have caused some of our clients to ask for clarification on whether and to what extent they might pose a threat to closing a deal.” Noting that other European governments have also turned to similar tools, O’Connor does not expect the measures to stall deals in Hungary significantly, saying that “some people may have been less inclined to look at Hungary as a place for their investments, but in our experience there has been no real threat here, rather an issue around managing perceptions and charting a course through any concerns raised by clients.”

Several recent deals support O’Connor’s report that opportunities remain, including GTT Communications' recent USD 2.15 billion sale of its infrastructure business to I Squared Capital (on which, O'Connor points out, Kinstellar advised) and the sale of Dutch insurer Aegon’s assets to Vienna Insurance Group via a bidding process. “Both deals had a cross border element,” he says, “but with a significant asset value in Hungary.”  

Other than the VIG-Aegon transaction, which O’Connor describes as “the really big one for Q4,” he reports that there is “strong foreign investment interest to be sure, mainly in renewables, especially solar, although we are still doing deals for clients involving more traditional energy sector assets.” In addition, he says, “aside from that, the banking and finance sector is very active – there are some opportunities we expect to come to market soon." Investors are also active in the healthcare and technology sectors, he says.

Finally, even with all the activity in Hungary, O’Connor still describes the back half of 2020 as mostly “stop and start in M&A." According to him, "the market was very enthusiastic in September, looking forward to a strong last quarter, but in the period leading up to the recent lockdown, the market was more cautious.” The good news, in the end, is that deals are being done, he says, “even if not at the usual pace and volume."

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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