Category: Croatia

Lovric, Novokmet & Partners has advised Fortenova on the sale of Agrolaguna and Vinarija Novigrad to Badel 1862. Miskovic & Miskovic advised Badel 1862.

Badel 1862 is a Croatian producer of spirits and wines. According to Miskovic & Miskovic, with this acquisition “Badel 1862 has continued to consolidate the local alcoholic drinks production industry and strengthen its leadership position in the production of quality and premium wines on the Croatian market. Badel’s offer is now additionally rounded off with premium wines from Istria, and thus becomes Croatia’s only company with a portfolio covering all the key wine regions and additionally strengthens its market position, with new opportunities for the growth of wine production.”

The Lovric, Novokmet & Partners team included Partner Pavo Novokmet and Senior Associate Katarina Simac Tot.

The Miskovic & Miskovic team included Partners Pavo Miskovic and Maja Seat, Attorneys at Law Hana Fiala and Vanda Frcko, and Legal Trainee Darija Drempetic.

Divjak, Topic, Bahtijarevic & Krka has promoted Dina Salapic and Andrej Zmikic to Partner in a promotion round that also saw Sanja Novoselic and Dominik Glavina promoted to Senior Attorneys at Law.

Salapic’s primary area of focus is corporate and M&A as well as banking & finance. She has worked for DTB since 2019 when she joined as an Attorney at Law. She was promoted to Senior Attorney at Law in 2024. Earlier, she worked for Ostermann & Partners (now Ostermann Ivancic) as an Associate between 2015 and 2018 and as an Attorney at Law between 2018 and 2019.

“I am truly happy and honored to be promoted to Partner in our legal powerhouse,” Salapic said. “DTB has given me the opportunity (and the autonomy, which I deeply value) to grow by leading our teams in some of the most significant M&A transactions in Croatia and the region. I’ve had the privilege of learning not only from my brilliant mentor Damir Topic and all of our exceptional Partners and colleagues, but also from our amazing clients, their co-advisors, and often our counterparties and their teams as well.”

Zmikic is DTB’s Head of our Employment Department. He has worked for the firm since 2014 when he joined as an Associate. In 2018, he became an Attorney at Law and, in 2022, took over the helm of the Employment department.

In recent years, Croatian enterprises have increasingly embraced innovative ownership structures to retain and incentivize top talent. Initially spearheaded by the IT sector, this trend has expanded across industries, from established family businesses to emerging ventures. The rationale is straightforward: aligning employee interests with long-term corporate success through equity participation. 

The IT sector, known for pioneering workplace perks, was among the first to recognize the strategic value of offering ownership stakes to key employees. This approach not only optimizes compensation but also ensures alignment with corporate objectives, particularly in anticipation of potential exit scenarios. 

As the trend gains momentum, companies are adopting diverse employee ownership models, with Employee Stock Ownership Plans (ESOPs) and their variations at the forefront. While the tax treatment of traditional ESOPs has improved as of 2024, many enterprises are gravitating toward alternative structures, particularly those involving holding companies. 

1          The Holding Company Model

This approach involves establishing a holding company jointly owned by the founder and key employees. Rather than granting direct stakes in the operating entity, the founder transfers a portion of their shares to the holding company, thereby indirectly linking employees to the business. This model offers several advantages: 

• Control and Flexibility
  • Founders retain greater influence over the operating company while maintaining flexibility in profit distribution.
• Ease of Unwinding
  • Mechanisms can be implemented to automatically manage the return of an employee’s stake, minimizing administrative burdens.

However, this model may fall short in adequately rewarding employees during exit events, as their indirect ownership may not fully capture the value realized. 

2          Hybrid Solutions 

To address these limitations, Croatian companies are increasingly adopting hybrid structures that combine elements of traditional ESOPs and holding company models. These hybrids ensure that key employees are appropriately rewarded in exit scenarios, even if their indirect ownership does not directly reflect the company’s valuation. 

3          Implementation Considerations

Designing and implementing employee ownership structures is a nuanced process requiring meticulous coordination between legal and tax advisors. Key considerations include: 

• Control Mechanisms
  • Safeguarding the founder’s interests while ensuring fair employee participation.
• Exit Protocols
  • Clearly defining the terms under which an employee’s stake can be returned or redeemed
• Legal Formalization
  • Engaging experienced notaries to formalize and deposit relevant documentation

In our recent experience, three out of five employee ownership projects involved holding company structures, one followed a traditional option plan, and one adopted a hybrid approach tailored to the company’s specific needs. 

Ultimately, the most successful enterprises view employee ownership not merely as a structural tool but as a strategic imperative. By fostering loyalty, motivation, and alignment, these companies are better positioned to navigate an increasingly competitive market and achieve sustainable growth.

By Tarja Krehic, Managing Partner, and Ivan Zornada, Partner, Krehic & Zornada Law Office

Cytowski & Partners has advised SplxAI on its USD 7 million series seed financing round led by LAUNCHub Ventures. Gunderson reportedly advised LAUNCHub Ventures.

According to Cytowski & Partners, Croatian-based SplxAI has been founded to disrupt the cybersecurity development landscape.

The Cytowski & Partners team included Partner Tytus Cytowski and Associates Kunal Kolhe, Fabiana Morales Centurion, and Heidi Fan. 

Croatia’s mergers and acquisitions market continues to exhibit remarkable dynamism, with strong activity across key sectors such as hospitality, healthcare, and alternative energy according to Tarja Krehic, Managing Partner at Krehic & Zornada, who also reports on legislative reforms aimed at aligning Croatia’s corporate governance and state-owned enterprise management with OECD standards.

“The M&A market remains vibrant, especially in the hospitality sector, where international investors continue to show strong interest,” Krehic begins. She explains that Croatia’s appeal as a tourist destination has been a driving force behind this trend, with foreign capital flowing into hotel acquisitions and other tourism-related ventures. “The medical services sector has also emerged as particularly attractive,” she adds. “Transactions involving private polyclinics being acquired by private equity, strategic investors, and insurance companies are becoming increasingly common. This surge is largely fueled by growing consumer demand for private medical services, which has been amplified by inefficiencies in the public healthcare system,” Krehic notes.

Another sector experiencing rapid growth is energy, particularly alternative energy projects. “We’re currently involved in several transactions around Power Purchase Agreements,” Krehic reveals. Large corporations in industries such as hospitality, telecommunications, and insurance are increasingly adopting PPAs to enhance their EDG compliance. “Virtual PPAs, which are new to the market and Croatia’s regulatory framework, are beginning to emerge as a notable trend,” she adds. “Croatia’s abundant natural resources and favorable geographic position make it particularly attractive for solar and wind energy projects.”

However, not all sectors are experiencing growth. Krehic points out that the IT sector has encountered recent setbacks due to geopolitical developments. “Newly announced U.S. tariffs targeting the EU have caused some companies to pause or cancel further acquisitions within Croatia and across Europe,” she explains. While IT was previously one of Croatia’s fastest-growing sectors, these external factors have slowed what was once significant momentum.

Turning to legislative developments, Krehic highlights 2025 as a transformative year for corporate governance in Croatia. “We have a new Companies Act and a revised Corporate Governance Code for companies listed on the Zagreb Stock Exchange,” she reports. These updates harmonize corporate governance practices with OECD standards, introducing modern structures and transparency requirements that aim to enhance investor confidence and operational efficiency. Additionally, “Croatia has finally aligned itself with the EU directive requiring listed companies to achieve a 40%/33% gender balance on supervisory and management boards. While some companies are resistant to these changes, this shift towards diversity is essential,” Krehic asserts. “It’s not only culturally significant but also financially beneficial.”

Finally, reforms are anticipated in the management of state-owned enterprises. “A new act governing SOEs is expected to be adopted by summer,” Krehic shares. This legislation is designed to “bring operations in line with OECD standards, focusing on transparency and modern corporate governance within Croatia’s sizable public sector – particularly in areas such as energy and natural resource management.” She also notes ongoing privatization efforts targeting SOEs in cargo transport infrastructure. “Although privatization has slowed compared to previous decades, it remains driven by EU and OECD requirements,” Krehic concludes.

Miskovic & Miskovic has advised Erste & Steiermaerkische Bank, Hrvatska Postanska Banka, OTP Banka, Privredna Banka Zagreb, Raiffeisenbank Austria, and Zagrebacka Banka on Republic of Croatia’s state EUR 1.75 billion bonds issuance.

According to Miskovic & Miskovic, the governmental bond issuances included retail investors and was supported by over 18,000 citizens investing approximately EUR 590 million, alongside institutional investors who contributed around EUR 1.16 billion. In total, bonds worth EUR 1.75 billion were issued. Since the first retail government bond issuance in 2023, a total of 251,000 retail investors have invested EUR 7.4 billion in Croatian governmental papers, significantly bolstering the capital markets in Croatia.

The Miskovic & Miskovic team included Partner Pavo Miskovic and Attorneys at Law Mislav Loncar and Hana Fiala.

Savoric & Partners has advised Ing-Grad on its planned IPO on the Zagreb Stock Exchange, where the company aims to raise approximately EUR 55 million by selling 30% of its treasury shares.

Ing-Grad is a Croatian construction firm founded in 1985. According to Savoric & Partners, Ing-Grad plans to offer 1.2 million shares, with a price range set between EUR 37 and EUR 46 per share. The proceeds will be used for strategic acquisitions – particularly in geotechnical engineering and other specialized construction segments – and for enhancing employee rewards and strengthening the company’s financial position. 

Savoric & Partners could not provide additional information on the matter.

Bradvica Maric Wahl Cesarec has advised Positive ARB on obtaining its investment firm license issued by the Croatian Financial Services Supervisory Agency.

According to BMWC, as part of an international group engaged in proprietary trading, Positive ARB is now fully authorized to conduct investment activities from Croatia.

The BMWC team included Partner Branko Skerlev, Attorney at Law Andrea Smolic, and Associate Stjepan Gvozdic.

Krehic Law has advised Eagle Hills Croatia on its acquisition of Suncani Hvar from CPI Property Group. Madirazza advised CPI Property Group. Hanzekovic & Partners reportedly advised Eagle Hills Croatia as well.

Eagle Hills Croatia is a real estate development company.

Suncani Hvar is a hospitality sector company.

The Krehic Law team included Partner Tarja Krehic and Attorney at Law Katarina Fulir.

The Madirazza team included Managing Partner Josip Madirazza and Partners Tatjana Radmilovic and Marinka Kovacic.

Divjak, Topic, Bahtijarevic & Krka has advised on the concentration notification for a joint venture between Koncar and Siemens Energy Group, resulting in the formation of Koncar – Transformatorski Kotlovi.

Koncar – Transformatorski Kotlovi focuses on producing and selling transformer tanks and is a result of an acquisition that took place in 2024 (as reported by CEE Legal Matters on July 18, 2024).

According to DTB, the competition clearance concerned approvals from the European Commission and authorities in Albania, Bosnia and Herzegovina, North Macedonia, Serbia, and Ukraine.

The DTB team included Senior Partner Mario Krka and Attorneys at Law Ana-Maria Sunko Peric and Dominik Glavina.