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Hot Practice in Hungary: Zoltan Forgo on Forgo, Damjanovic & Partners’ M&A Practice

Hot Practice in Hungary: Zoltan Forgo on Forgo, Damjanovic & Partners’ M&A Practice

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A most vibrant year for the M&A department of Forgo, Damjanovic & Partners was primarily driven by the healthcare, insurance, and energy sectors, according to Managing Partner Zoltan Forgo.

As our firm has traditionally been focusing primarily on transactional work, it comes as no surprise that our hottest practice has been M&A, Forgo begins. “Speaking about the sectors that have been our primary drivers of that work, three come out on top – healthcare, insurance, and renewable energy.

Delving into the first, Forgo remarks that the healthcare sector has been animated in 2022. At the start of the year, back in the first quarter, we had the privilege to close a transaction on the sale of the DaVinci private hospital – one of the biggest private clinics in Hungary. Given that the healthcare sector has been undergoing a consolidation wave – which we expect to continue in 2023 – so too do we predict that our M&A practice will remain busy in this area,” he explains. 

“When it comes to the insurance sector, our biggest transaction of 2022 was the Talanx Group’s sale to the Hungarian state of a 67% shareholding in the Hungarian Post Insurance Companies – one handling life insurance, and the other dealing with non-life insurance,” Forgo says. According to him, with the acquisition agreement having been signed at the end of 2022, the closing of this transaction will soon take place. “The brio of the insurance sector is primarily driven by a strong desire of the Hungarian state to have clear, direct ownership of more than 50% of the insurance sector by domestic owners. To achieve this, the government, on the one hand, has been using the FDI screening mechanism, whereby it can block transactions between foreign owners. This specifically happened in the proposed Aegon-Vienna Insurance Group sale, where the Hungarian state blocked the sale and, eventually, the Hungarian state itself acquired a 45% shareholding interest in Aegon’s Hungarian operations,” he notes. “On the other hand, the government increased the special tax on the insurance sector twice in 2022, to a painful level, which may result in further foreign owners in the insurance sector wishing to exit the Hungarian market. So further transactions in this sector may come in the foreseeable future,” he explains.

Furthermore, Forgo shares that Forgo, Damjanovic & Partners has been involved in a number of renewables transactions, first and foremost in the solar energy area, “both on the sell and the buy side. Our flagship client in this sector is the Danish solar energy company Obton, which manages EUR 3.5 billion in assets. Due to the soaring electricity prices, solar park sales are a booming area in Hungary, and we expect even more activity in this area for 2023,” he says.

Finally, Forgo says that their firm also noticed two interesting trends when it came to their recent M&A work. Firstly, it is worth noting that outbound investments are a new phenomenon and that we are seeing more and more local, Hungarian companies seeking to acquire and invest in other parts of Europe – which could mean more M&A work overall,” he explains. “In addition, due to our strengths in dispute resolution, we have worked on a number of corporate disputes in 2022, some of which end in shareholder exists, which ultimately means more work for our M&A department as well – seeing this synergy in action is an interesting development for us,” he shares. “Looking ahead, we have set the bar high in 2022, but I think we have a very good chance to maintain current activity levels and even build further in the upcoming year,” Forgo concludes.

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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