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2019 CEE Deals Of The Year

2019 CEE Deals Of The Year

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It is with great pleasure that we announce the 2019 CEE Deal of the Year Award winners – the most important, complicated, significant, and valuable deals across Central and Eastern Europe.

The winners were selected by this year’s Final Selection Committee:

  • Christian Blatchford of Energo-Pro (Czech Republic)
  • Alexandra Doytchinova of Schoenherr (Bulgaria)
  • Rene Frolov of Fort Legal (Estonia)
  • Ron Given of Deloitte Legal (Czech Republic)
  • Judith Gliniecki of CEE Equity Partners (Poland)
  • Bora Kaya of Gama Power Systems (Turkey)
  • Hugh Owen of Go2Law (Slovakia)
  • Roman Pecenka of PRK Partners (Czech Republic)
  • Andras Posztl of DLA Piper (Hungary)
  • Mykola Stetsenko of Avellum (Ukraine)
  • Pawel Szaja of Shearman & Sterling (United Kingdom)
  • Damir Topic of Divjak, Topic & Bahtijarevic (Croatia)

The actual awards will be handed out at the recently-rescheduled 2020 Deal of the Year Awards Banquet on October 13, 2020 in London, at which time the overall CEE Deal of the Year will also be announced.

Austria:

Steinhoff Group Financial Restructuring

Submitting Firm: Wolf Theiss

Other Firms: Allen & Overy; Binder Groesswang; Dorda; Eisenberger & Herzog; Fellner Wratzfeld & Partner; Gleiss Lutz; Kirkland & Ellis; Latham & Watkins; and Linklaters

Summary

With debt of approximately EUR 9 billion, and in order to stabilize its financial situation and continue operating, the Steinhoff Group underwent overall comprehensive restructuring, first entering into a “Company Voluntary Agreement” between Steinhoff Europe (and Steinhoff Finance Holding) and their creditors. The CVA is a legal process from the United Kingdom that allows a company with debt problems to reach a voluntary agreement with creditors involving the payment of debts but allowing it to continue to operate. In order to be eligible, Steinhoff had to undergo major corporate restructuring, including transferring its business operations from Austria to England.

In parallel, Steinhoff pursued debt refinancing negotiations with a syndicate of banks. A total of 12 Austrian holding companies were included in the financial restructuring process.  In August 2019, the financial long-term restructuring of the Steinhoff-Group was finally implemented.

According to Wolf Theiss, the restructuring of Austrian debt via an English restructuring tool is the first of its kind in Austria.

Shortlist Panel Comments

  • “A crucial restructuring case in relation to one of Austria’s (and CEE’s) big furniture players. The transaction had implications on thousands of jobs in Austria and is therefore, in addition to the legal complexity, the “deal of the year” from my perspective.”
  • “This was a good and large restructuring of a distressed company that had been advised by the submitting firm for a long time. At the time of the restructuring, the submitting firm appears to have followed the lead of an all-star cast of US, UK, and German firms, both for the debtor in distress and its various creditors. Notably, a special UK financial restructuring technique was utilized, as the submitting firm reports had not previously been used in Austria.”
  • “Most complex transaction that required highly skilled corporate, real estate, financing, and tax teams over a term of almost two years.”
  • “Not necessarily an M&A deal but involving divestitures; highly complex restructuring cross border within and outside EU.”

Belarus:

EBRD’s and Zubr Capital’s Investments in Mila Group

Submitting Firm: SBH Law Offices

Other Firms: Bird & Bird; Revera

Summary

The EBRD provided financing for the Mila Group and the Zubr Capital Fund acquired a minority stake in the group, which supplies beauty and care products as well as selling them through its own Mila network of drugstores. The investment by Zubr Capital and the EBRD was designed to allow Mila to increase its number of stores, create flagship stores, and develop its product and assortment policy.

The SBH Law Offices described the deal, which was signed on May 29 and closed on September 4, 2019, as “another example of successful financing of development of private business in Belarus through capital entry.”

Bosnia & Herzegovina:

Aco Kabanica Sale of Elta-Kabel to Telekom Srpske

Submitting Firm: Dimitrijevic & Partners

Summary

Bosnia’s Mtel a.d. Banja Luka, the mobile arm of Telekom Srpske – the second-largest telecommunications company in Bosnia, majority-owned by Serbian state-controlled Telekom Srbija – acquired local cable operator Elta-Kabel, the leading cable operator in the Republic of Srpska.

Following the completion of the deal, and in line with its business strategy, Mtel’s investments this year will add up to EUR 150 million (USD 165.9 million), the company reported.

According to Dimitrijevic & Partners, “negotiations took months and the structure of the deal in legal and economic aspects resulted in, according to the opinions of all participants, one of the most complex acquisitions.”

The deal was signed on May 8 and closed on August 30, 2019.

Bulgaria:

United Group’s Acquisition of Vivacom Bulgaria

Submitting Firms: CMS; Schoenherr

Other Firms: Kambourov & Partners; Latham & Watkins; Paul, Weiss, Rifkind, Wharton & Garrison

Summary

United Group, a leading telecoms and media business in South-Eastern Europe, which is owned by BC Partners, acquired Vivacom, for EUR 1.2 billion in a private auction sale that was widely reported to be the largest deal in Bulgaria in 2019 in terms of both value and asset size.

Vivacom, which was the first telecommunications company in Bulgaria and remains the country’s largest telecoms operator, provides advanced services including fiber broadband, mobile communications, and digital TV to over 1.8 million unique customers in Bulgaria.

The complexity of the deal was exacerbated by ongoing legal disputes initiated in various courts by an entity claiming to be a former shareholder in a holding company that owned Vivacom.

The deal was signed on November 7, 2019.

Shortlist Panel Comments

  • “The deal of the year in terms of value and complexity (e.g., shareholding structure and pending shareholder/ownership disputes). Sophisticated and demanding parties both on sell- (VTB Capital) and buy-side (BC Partners)”
  • “Apart from the significant value (likely the highest deal value for Bulgaria in 2019), this transaction was challenging as subject to various parallel work-streams, certain political sensitivity and huge media interest.”
  • “This is the largest deal in Bulgaria ever, at 1.2 billion EUR. The deal was extremely complicated, with a lot of international and local law firms involved and complex litigation and arbitration issues. The exit was delayed by more than three years and it is by far the most complicated M&A deal in Bulgarian history.”

Croatia:

United Group’s Acquisition of Tele2 Croatia from Tele2 AB

Submitting Firm: Divjak, Topic, Bahtijarevic & Krka

Other Firms: Kirkland & Ellis; Schoenherr

Summary

United Group acquired Tele2 Croatia from Sweden’sTele2 AB in what was reported to be the largest M&A deal in Croatia in 2019.

Tele2 is one of only three telecom providers operating in Croatia, with a market share of almost 20%.

The enterprise value of the deal – the first-ever sale of a mobile operator in Croatia – was EUR 220 million.

The deal was signed on May 31, 2019.

Shortlist Panel Comments

  • “In my view by far the most significant in terms of deal complexity, regional significance of the transaction, [and] legal complexity.”
  • “The largest deal by size in 2019 in Croatia. First-ever M&A deal in the Croatian telecom market. Immensely challenging competition approval in two phases ended with success.”
  • “This was without doubt the M&A transaction of the year in Croatia, not just because of its size and importance for the telecom market but also for the complexity of competition clearance the deal had to go through. United Media in Croatia also has one of the three leading TV broadcasters – NovaTV – while Croatia has an obsolete Act on Electronic Media which prevents holding stakes in the media and telecom sector. The deal was cleared by the Competition Agency … after intense lobbying.”

Czech Republic:

Advent International and Zentiva’s Acquisition of Alvogen’s CEE Business

Submitting Firm: CMS

Other Firms: Freshfields Bruckhaus Deringer; White & Case

Summary

Global private equity firm Advent International and its Czech portfolio company Zentiva acquired the CEE business of global generic and over-the-counter pharmaceuticals manufacturer Alvogen, bringing together two leading branded generics and over-the-counter businesses in CEE.

Financial details were not disclosed.

Alvogen CEE markets over 200 generic and OTC products – including the Lactacyd, Persen, and EuBiotic brands – across multiple therapeutic areas. The company has leading market positions in over 14 CEE jurisdictions, including Russia, Romania, Bulgaria, Poland, and the Balkans, and employs over 1,000 people.

Shortlist Panel Comments

  • “Regional deal following the previous acquisition of Zentiva, one of the largest PE deals in the CEE region.”
  • “This deal was very significant for the whole CEE region as it touched many important key markets. The complexity was based not only on the scale of the deal, but also on the high level of regulation of the pharmaceutical industry and intensive cross-border cooperation of legal teams across several jurisdictions.”
  • “Another CEE deal which involves various jurisdictions and it is great it was led from the Czech Republic.”

Estonia:

Apax’s Acquisition of Baltic Classifieds Group from UP Invest OU

Submitting Firms: Eversheds Sutherland Ots & Co; Cobalt; TGS Baltic 

Other Firms: Ellex Raidla; Simpson Thacher & Bartlett 

Summary

Apax Partners and Media Investments & Holding OU acquired the Baltic Classifieds Group, a portfolio of online classified advertising platforms in the Baltics for automotive, real estate, jobs, and general merchandise.

The portfolio includes Autoplius.lt, Aruodas.lt, Skelbiu.lt, CVBankas.lt, KV.ee, City24.ee, City24.lv, Osta.ee, and Soov.ee.

The portals generate more than 50 million monthly visits. The deal, which was signed on May 10 and closed on July 24, 2019, was made by auction and involved W&I insurance – described as “tools rarely used for such deals in the region.”

It represented Apax’s first investment in the Baltics.

Shortlist Panel Comments

  • “This was clearly a landmark deal in Estonia’s M&A market – probably the largest deal in terms of deal value in 2019.”
  • “This is simply the deal of the year not only in Estonia, but in the entire Baltics, standing out as the largest and most complex M&A deal by one of the largest PE funds in the world.”
  • “Very large deal, involving all three Baltic countries; a historic entry of Apex Partners into Baltic markets.”
  • “In terms of transaction value, surely one of the biggest deals. In addition, the merger clearance process must have been very challenging, as most of the sites (kv.ee, city24.ee, auto24.ee) are top used sites in Estonia. Thirdly, the whole deal from the owner’s side was very well-packaged and thought through.”

Greece:

Hellenic Republic’s Bond Issuance

Submitting Firm: Cleary Gottlieb Steen & Hamilton

Other Firms: Allen & Overy; Karatzas & Partners; Koutalidis Law Firm

Summary

The Hellenic Republic issued a ten-year benchmark bond, its return to the international capital markets on a “normal course” basis, in four offerings over the course of the year.

The market appetite for the instruments led to the Republic’s tap issuance of EUR 1.5 billion aggregate principal amount of 3.875% notes due 2029 in October, which will be consolidated and form a single series with the notes issued in March.

In addition to the ten-year instruments, the Republic issued EUR 2.5 billion aggregate principal amount of 3.45% notes due 2024 and EUR 2.5 billion aggregate principal amount of 1.875% notes due 2026.

These were Greece’s first bond offerings since the conclusion of the fiscal bailout program in 2018, and comprised a principal amount of EUR 9 billion issued over a range of benchmark maturities.

According to reports, the pricing demonstrated significant positive momentum for the Republic, and the bond issuances mark a return to business as usual for the Republic.

Hungary:

Extreme Digital/eMAG Merger

Submitting Firm: Dentons

Other Firms: Allen & Overy; DLA Piper 

Summary

Hungarian online consumer electronics retailer Extreme Digital merged with eMAG Hungary – a member of South Africa’s Naspers Group – in a merger of the number one and number two online retailers in Hungary. The deal was signed in February and closed in October, 2019. As a result of the merger, eMAG Romania (owner of eMAG’s Hungarian subsidiary) became the majority shareholder of the new entity, with 52 percent of the shares, with the remaining 48 percent remaining with the Extreme Digital shareholders. The new company will initially be present in Hungary, Romania, Czech Republic, Slovakia, Slovenia, Croatia, Bulgaria, and Austria.

In addition, the Hungarian Competition Authority’s approval of the merger was described by Dentons as “a milestone in [its] decision-making practice … and thus, can be used as a good precedent in the future given that [it] defined one single product market (online and offline combined) for the sale of electronic products.

Shortlist Panel Comments

  • “Undoubtedly, the largest e-commerce transaction to date in Hungary with long term impact on the e-commerce arena in Hungary.”
  • “A truly free market deal between independent parties and private individuals as shareholders are always difficult and complex.”
  • “A complex regional deal.”
  • “I am voting on this due to the impact of the deal on the very competitive online sales market. These are two leading players merging and the deal has reshaped the market significantly.”
  • “This was picked up by the media a lot, and indeed is one of the largest deals on the market.”
  • “The transaction concerns a very interesting and upcoming market (e-commerce), seems to have been of high value and complex, with an increased complexity due to the participants whose interests had to be considered.”

Latvia:

Air Baltic’s EUR 200 Million Debut Eurobond Issuance

Submitting Firms: Cobalt; Linklaters

Other Firms: Dentons; Sorainen

Summary

AS Air Baltic Corporation, the flag carrier of Latvia, issued EUR 200 million 6.75% notes due 2024 – the largest ever corporate bond issue originating from Latvia. J.P. Morgan Securities plc and AB SEB Bankas were joint lead managers and BNY Mellon Corporate Trustee Services Limited was trustee. The bonds were listed on the Euronext Dublin stock exchange.

Air Baltic is 80% owned by the government of Latvia and is the leading airline in the Baltic region, flying principally out of Riga, Vilnius, and Tallin.

The transaction was part of the company’s growth strategy and helped to strengthened Air Baltic’s liquidity, as well as allowing it to repay existing indebtedness, finance its upcoming aircraft purchase, and invest in further development.

Shortlist Panel Comments

  • “[It had an] impact on local capital markets, [involved the] flagship carrier, [and had both] novelty and complexity (legal and industry).”
  • “The largest bond issue from Latvia. A complex and careful deal structure. The importance of the deal relates to the possibility of broad effect on capital markets in Baltics later on.”
  • “Largest Eurobond issuance for a Latvian company to date.”

Lithuania:

Idex’s Acquisition of Danpower Baltic UAB from Danpower and Geco Investicijos

Submitting Firms: Cobalt; Triniti 

Other Firms: DLA Piper

Summary

French renewable energy group Idex – a subsidiary of Antin Infrastructure Partners – acquired 50% of the shares of Danpower Baltic UAB (now Idex Baltic UAB) from Danpower GmbH and an additional 40% of the shares from UAB GECO Investicijos, which retained the remaining 10% stake.

Over its five years of operations, Germany’s Danpower GmbH has invested around EUR 100 million in Lithuania.

The company operates six biofuel boiler-houses and a cogeneration plant in the Lithuanian cities of Vilnius, Kaunas, and Joniskis. Idex’s long-term investment is intended to be a platform for expansion into other Baltic and Nordic countries and Poland, resulting in total investment around 200 million euros in international development.

The value of the deal, which was signed on August 8 and closed on October 29, 2019, was not disclosed.

Shortlist Panel Comments

  • “Must have been a large volume deal.”
  • “This is a strategically important entrance into Lithuanian heating sector which is very complex and resonating.”

Moldova:

Duet Private Equity’s Acquisition of Red Union Fenosa SA and Gas Natural Fenosa Furnizare Energie SRL from Naturgy Inversiones Internacionales SA

Submitting Firm: ACI Partners

Other Firms: Bird & Bird; PeliFilip; Simmons & Simmons; Tuca Zbarcea & Asociatii; Turcan Cazac

Summary

Duet Private Equity, through one of its investment SPVs, acquired 100% of Red Union Fenosa S.A. and Gas Natural Fenosa Furnizare Energie S.R.L. (“GNF Moldova”). GNF Moldova, an affiliate of Naturgy Energy Group, is the leading operator in the electricity distribution and supply sector in Moldova, where it has been present since 2000, when the privatization of the electricity sector took place driven by the independence of Moldova. The company now holds a 70% market share in electricity distribution in the country and covers 2/3 of the population, including the capital of Moldova, Chisinau.

The transaction, which was valued at EUR 141 million – making it the largest private deal in Moldovan history – was signed on April 11 and closed on August 1, 2019.

Shortlist Panel Comments

  • “This is definitely the Deal of the Year in Moldova. The target is the biggest and the most important and strategical business for Moldova. The deal was quite complex and spanned several jurisdictions. It also required financing from an international consortium of banks (Moldova and Romania).”
  • “The deal itself is of vital importance for Moldovan economy, taking into consideration the industry of the target company – electricity supply and distribution, a basic, and at the same time inherently important, commodity for consumers. The deal value is also an important clue, and … the fact that the target holds a 70% market share in electricity distribution shapes the conclusion that this is a deal that, directly and indirectly, affects most energy consumers in Moldova. Beyond its economic value and importance, it’s a deal that requires, in my opinion, a lot of involvement from local lawyers from the legal perspective. Namely, the shares are sold/purchased by/from a local legal person, due diligence must be focused mostly on the assessment of compliance with local regulations, the deal itself must be done and completed under local procedures, at the local public bodies.” 

Montenegro:

Crnogorska Komercijalna Banka’s Acquisition of Majority Stake in Societe Generale Banka Montenegro

Submitting Firms: Jones Day; Moravcevic Vojnovic i Partneri in cooperation with Schoenherr

Other Firms: CMS; Kalo & Associates; Sytnyk & Partners

Summary

Crnogorska Komercijalna Banka A.D. (OTP Bank Nyrt.’s Montenegrin subsidiary) acquired a 90.55% stake in Societe Generale Montenegro from Societe Generale. The deal was part of a cooperation agreement signed between Societe Generale and OTP Bank Nyrt. that encompassed the provision of mutual services in various fields (including, but not limited to investment banking, capital markets, financing cash, and liquidity management). The cooperation agreement includes or soon will include Hungary, Croatia, Bulgaria, Albania, Moldova, and Serbia.

The deal, which was the biggest transaction in the financial sector in Montenegro in 2019 and one of the largest in the market overall, was signed on February 27 and closed on July 16, 2019.

Shortlist Panel Comments

  • “A very important project for the region in general with great influence on the Montenegrin banking sector.”
  • “Probably one of the most significant transactions in Montenegro in the last ten years … due to the number of necessary clearances, the complexity of the banking operation, and due diligence as well. Therefore, I would dare to say that it deserves first place without any doubt.”
  • “One of the biggest transactions in the Montenegrin market last year – successfully finalized.”

Poland:

Acquisition of DCT Gdansk S.A. from Global Infrastructure Fund II

Submitting Firms: Dentons; Linklaters; Rymarz Zdort

Other Firms: Clifford Chance; Stibbe; Weil, Gotshal & Manges; White & Case

Summary

PSA International Ptd Ltd, the Polish Development Fund, and the IFM Global Infrastructure Fund (managed by IFM Investors) acquired DCT Gdansk S.A., Poland’s largest container terminal, from Australia’s Macquarie Infrastructure and Real Assets and Australia’s MTAA Superannuation Fund, Statewide Superannuation Fund, and Westscheme Fund.

DCT Gdansk is Poland’s largest and fastest-growing Polish container terminal, and it is the only deep-water terminal in the Baltic Sea region at which ships from the Far East call directly. It is also the only terminal in the Baltic that can serve ultra large container vessels with a capacity of up to 23,000 TEUs.

Through its Global Infrastructure Fund II, Macquarie Infrastructure and Real Assets held almost 64% of shares in DCT Gdansk S.A. MTAA Superannuation Fund held 18% of the shares, and Statewide Superannuation Fund and Westscheme Fund each held 9%.

Financial details were not disclosed, but the value was reported to be over PLN 5 billion (EUR 1.18 billion), making it one of the largest transactions signed and closed in Poland in 2019.

The deal was signed on March 19 and closed on May 21, 2019.

Romania:

Blackstone’s Acquisition of Minority Stake in Superbet

Submitting Firm: Wolf Theiss

Other Firms: Bulboaca & Asociatii; Herzog, Fox & Neeman; Jones Day; Kirkland & Ellis; Simpson Thacher & Bartlett

Summary

Blackstone Tactical Opportunities – part of the Blackstone investment fund – acquired a 15% shareholding in Romania’s Superbet Group for 175 million. The deal, which was one of the largest transactions in Romania in 2019, has an enterprise value of roughly EUR 1.2 billion. It was signed and closed on May 8, 2019.

The Superbet Group is a sports betting and gaming company that was co-founded in 2008 by Romanian entrepreneur Sacha Dragic, who is also the company’s CEO. It operates a network of over 1,200 betting agencies across Romania and launched a digital platform in 2016 and a mobile application in 2018. In 2017, Superbet officially launched operations in Poland, and it has offices in Austria, Serbia, Croatia, Malta, and the United Kingdom.

Shortlist Panel Comments

  • “This was the largest transaction in the Romanian market in 2019 with an equity value of over EUR 1.2 billion. It also marked the first entry of Blackstone … into the Romanian market.”
  • “Fast paced legal advice, cross border matter, high-valued.”
  • “It is the first direct acquisition of Blackstone in Romania, also a sign that the Romanian market is evolving. I believe Blackstone and Morgan Stanley Real Estate Investing were the most important newcomers on the Romanian market in 2019.”
  • “The size of the deal is impressive for an M&A deal in Romania, but also the quality of the bidder implicated in the process.”

Russia:

Severgroup’s Acquisition of TPG’s 34% Shareholding in Lenta and Subsequent Mandatory Tender Offer

Submitting Firm: Cleary Gottlieb Steen & Hamilton 

Other Firms: Clifford Chance; Freshfields Bruckhaus Deringer; Ogier

Summary

Severgroup, held by Russian entrepreneur Alexey Mordashov, acquired TPG’s 34% shareholding in Lenta for USD 599 million and the EBRD’s 7.5% stake in Lenta for USD 130 million.

The sale by TPG and the EBRD triggered a requirement for Severgroup to make a mandatory tender offer for all remaining shares in Lenta.

As a result of the MTO, a further 37% of Lenta shares were tendered by public shareholders and purchased for USD 640 million, in one of the largest public tender offers ever carried out for a Russian business, taking Severgroup to a 79% holding.

Shortlist Panel Comments

  • “This is a major transaction for the market. Importantly, it is legally complex. In particular, mandatory tender offers are still relatively rare in Russia.”

Serbia:

Coca Cola HBC’s Acquisition of Bambi from Mid Europa Partners

Submitting Firms: BDK Advokati; Karanovic & Partners

Other Firms: Dechert; Latham & Watkins; Norton Rose Fulbright; White & Case; Zavisin, Semiz & Partneri 

Summary

Coca Cola HBC AG acquired Bambi a.d., the leading cookie producer in the countries of the former Yugoslavia, from Mid Europa Partners, for EUR 260 million. The deal was signed on February 17 and closed on June 18, 2019.

Mid Europa had acquired Bambi, which was founded in 1967, in 2015, along with Imlek and Knjaz Miloc, the leading regional dairy and natural mineral water companies, forming the Moji Brendovi consumer group. In 2018, Bambi recorded revenues of approximately EUR 80 million, of which more than two-thirds were generated in Serbia and the rest predominantly in other countries in the Western Balkans. As a result of its acquisition, Coca Cola HBC will add well-known brands in the Balkan region, such as Bambi, Plazma, Wellness and Zlatni Pek, to its portfolio.

Shortlist Panel Comments

  • “This deal is significant not only because of its size … but also because of its complexity. Moreover, it is of great importance for Serbian business market because it proves that a global leader such as Coca Cola believes that it is worth it to invest and expand their business in Western Balkans.”
  • “One of the largest deals in Serbia in 2019.”
  • “One of the largest conventional M&A transactions of 2019.”
  • “This is a standard cross-border English law governed M&A, but the target is sizeable and the acquisition is interesting business-wise because it ushered Coca Cola into the Serbian confectionary market.”

Slovakia:

PPF Group’s Acquisition of CME

Submitting Firm: White & Case 

Other Firms: Allen & Overy; Bondoc & Asociatii; Covington & Burling; Djingov, Gouginski, Kyutchukov & Velichkov; Sullivan & Cromwell

Summary

The PPF Group acquired Central European Media Enterprises, which operates television stations in Bulgaria, the Czech Republic, Romania, Slovakia (where it was the owner of the Markiza TV station, the largest private TV station in the country), and Slovenia, for USD 2.1 billion. BNP Paribas and Societe Generale acted as structuring advisors to PPF on the EUR 1.15 billion acquisition facilities, which were fully underwritten by BNP Paribas, Credit Agricole CIB, Credit Suisse, HSBC, Societe Generale, and UniCredit. The deal was signed on October 10, 2019.

Shortlist Panel Comments

  • “While this deal was not ‘in Slovakia’ as such (it was a regional deal and this is the Slovak part only), I still think that the Slovak part is significant and sufficiently complex and interesting.”
  •  “Biggest M&A deal in CEE with lots of specialist advice required.”
  • “This is regionally significant deal … and Markiza (the asset in Slovakia) would by itself represent a major challenge.”
  • “By far the most significant transaction on the market.”

Slovenia:

Abanka Privatization

Submitting Firms: Kavcic, Bracun & Partners; Wolf Theiss

Other Firms: Jadek & Pensa; Paul, Weiss, Rifkind, Wharton & Garrison

Summary

Biser Bidco and NKBM successfully bid for 100% shares of Abanka d.d., the third largest Slovenian bank, in a privatization process which concluded on June 20, 2019. The value of the transaction was approximately EUR 511 million.

Abanka had been restructured by additional capital contributed by the state as well as the possibility to transfer NPLs to the State-owned bad bank (BAMC).

The deal was described as “the most successful bank privatization case in Slovenia.”

Shortlist Panel Comments

  • “The largest deal locally.”
  • “Very successful and complex privatization process. The transaction was governed by rules on privatization, state aid rules, and the banking regulatory framework under a strict timeline imposed due to EC commitments. The biggest transaction in the banking sector signed in 2019 and closed in 2020.”

Turkey:

Sisal’s Successful Bid to Operate Turkish State Lottery

Submitting Firm: GKC Partners 

Other Firms: Balcioglu Selcuk Ardiyok Keki Attorney Partnership; Dentons; Lexist Law Firm; White & Case

Summary

A special joint venture company called Sisal Sans Interaktif Hizmetler ve Sans Oyunlari Yatirimlari A.S., created by Sisal S.p.A. (an Italian group operating in the gaming and payment services sector that is a portfolio company of CVC Capital Partners) and Demiroren Holding subsidiary Sans Digital ve Interaktif Hizmetler Teknoloji Yatirim A.S., made a successful bid for a ten-year contract to operate Turkey’s Milli Piyango lottery that was tendered by its license holder, Turkey’s Wealth Fund. The deal was signed and closed on August 29, 2019.

The contract will operate on a revenue and risk-sharing basis, with Sisal-Sans guaranteeing revenue to the Turkish Wealth Fund of more than USD five billion over its ten-year lifetime. It includes the management and development of a gaming system and games on behalf of the Turkish Wealth Fund, and the development and management of a portfolio of numerical games, instant lotteries, and online games that will be distributed across a network of at least 10,000 points of sale.

It was the first completed transaction of the Turkey Wealth Fund, the Turkish sovereign wealth fund, which was established two years ago. Sisal will provide software and other IT services to Sisal Sans and introduce new games and technology to Turkey under an agreement called the Sisal Support Agreement. Sisal Sans will establish a gaming center and a risk center, appoint mobile dealers, and expand the network of physical retail dealers.

Shortlist Panel Comments

  • “This deal is of great significance to Turkey’s national lottery and gaming operations. Its risk-sharing basis and Sisal Sans’s revenue guarantee of approximately 5 billion USD make the transaction outstanding, as it is also not a privatization or a concession, but a transfer of management for ten years. This deal will also help develop lottery and gaming operations in Turkey (on an online basis as well) and serve as advancements in terms of offerings to consumers.”

Ukraine:

NEQSOL’s Acquisition of VF Ukraine

Submitting Firm: DLA Piper

Other Firms: Aequo; Avellum; Latham & Watkins; Linklaters; PwC Legal

Summary

NEQSOL acquired Ukrainian mobile network operator VF Ukraine from Russian telecommunications operator MTS Group for USD 734 million, including USD 84 million of earn-out payment.

Acquisition financing for the deal, which was signed on November 22 and closed on December 3, 2019, was obtained by a group of international funds and financial institutions led by J.P. Morgan Securities and Raiffeisen Bank International.

Shortlist Panel Comments

  • “Largest M&A deal in Ukraine.”
  • “The deal is by far the biggest and most important announced M&A transaction of the year in Ukraine.”

This Article was originally published in Issue 7.4 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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COBALT is a trusted partner for daily matters and complex large-scale transactions and disputes. The firm’s broad spectrum of expertise and established position as the market leader give a comprehensive basis for providing advice on special areas of business law.

We advise top international and regional businesses, financial institutions, state and local governments, and the region’s most promising start-ups. We offer leading-edge solutions in key industry sectors: Consumer Products, Trade & Distribution, Real Estate & Construction, Pharmaceuticals & Healthcare, Energy & Utilities, Communications, Media & Technologies, Financial Services, Transport & Logistics.

COBALT has been named Baltic Law Firm of the Year 6 times. We were recognized as the Most Innovative Law Firm of the Year 2019 in the Baltics at the IFLR European Awards in London. COBALT also won CEE Legal Matters Deal of the Year Award for Estonia, Latvia, and Lithuania, as well as the overall Baltic Deal of the Year, at the 2019 CEE Legal Matters Awards. We have received multiple awards from the Chambers Europe, IFLR, The Lawyer and Mergermarket and we are regularly listed amongst the top performing M&A legal advisors in the Bloomberg, Thomson Reuters and Mergermarket deal tables

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