Category: Interviews

  • Gauging the GDPR in the Czech Republic

    On May 25, 2018, the General Data Protection Regulation finally came into effect, imposing new requirements on organizations within the European Union and on those outside the EU that offer goods or services to EU data subjects or monitor their behavior. To learn more about the state of readiness in one such country, we spoke to Schoenherr attorney and Data Protection specialist Eva Bajakova in Prague.

    CEELM: Eva, has the GDPR been fully adopted into Czech law? Were the changes from previous Czech law substantial?

    E.B.: On May 25, 2018, the GDPR became directly applicable in the EU, plus Iceland, Norway, and Liechtenstein. In order to better link Czech law with the GDPR, some partial aspects of the GDPR will be regulated in a new Czech Data Processing Act, a draft of which has been finalized, but which awaits parliamentary approval and signing by the president. The act was not passed in time, which is likely to lead to some legal uncertainty.

    The GDPR represents the greatest change in Data Protection law in the last 20 years. The GDPR introduces higher privacy standards. What was considered merely good practice under current legislation has become mandatory under the GDPR. And of course there are some new obligations too, such as the obligation to notify the supervisory authority of a personal data breach, and (for some) the obligation to designate a data protection officer. After May 25, 2018, infringers may be fined up to EUR 20 million or 4% of the undertaking’s total worldwide turnover, whichever is higher.

    CEELM: What were the highest fines ever imposed by the Czech supervisory authority under the previous regime? 

    E.B.: The record fine imposed by the Czech Office for Personal Data Protection was CZK 4.25 million (approximately EUR 167,000) in May 2017 on a spammer company. However, spamming is regulated by special legislation. The highest fine ever imposed based on the old Data Protection Act was CZK 3.6 million (approximately EUR 140,000) in April 2016 on a mobile operator whose employee allegedly stole the personal data of 1.2 million customers. Such fines seem ridiculously low when compared to the maximum fine for data breaches under the GDPR.

    CEELM: What’s the general level of readiness of companies in the Czech market?

    E.B.: It’s a work in progress. According to data published by the Czech Chamber of Commerce in March 2018, over 80% of Czech companies knew that they needed to implement the GDPR. The survey was conducted in late January and early February, with 580 companies of all sizes taking part. Still, with almost 500,000 companies in the Czech Republic the overall level of readiness is difficult to estimate. My estimation is that the majority of active companies are at least partially GDPR-compliant.     

    CEELM: What particular aspects of GDPR compliance are companies pushing back against the most?

    E.B.: When implementing the GDPR, many companies find that their internal data processing procedures need to be adjusted to process only what is necessary and to comply with the “need to know” principle. Unfortunately, some companies are also discovering that they cannot rely on consent for personal data processing gained under the previous legislation. They then have to invest a lot of time and effort in obtaining new consents that are GDPR compliant. 

    CEELM: What’s your personal view of the GDPR, and on the issue of data privacy in general? Do you believe the GDPR represents an appropriate balance of various interests, or does it go beyond what is necessary?

    E.B.: Prior to March 2018, nobody had heard of Cambridge Analytica. I believe that the recent data misuse scandals, like the one involving that company, show that a better legal framework is needed. One of the main goals of the GDPR is to give people more control over their personal data, which is a good and reasonable aim. 

    I see the GDPR as a compromise in some ways. It targets all types of companies – large Internet companies (including social networks) as well as small businesses. Of course, for smaller businesses, the GDPR can mean too much paperwork. On the other hand, time will show how efficiently the GDPR can regulate the biggest Internet players and if an extra layer of regulatory tools should be added for them.     

    CEELM: What steps has Schoenherr taken in the Czech Republic to help keep clients informed and prepared?

    E.B.: Schoenherr has published several detailed newsletters about the GDPR. My colleagues in Prague have also discussed the GDPR at business breakfasts for our clients. GDPR-related topics are very popular throughout Schoenherr’s CEE network. It is a bulky piece of legislation and clients want to know how to deal with it effectively. Currently, we are involved in numerous GDPR projects, some of them covering various European jurisdictions. It is very rewarding work with great international reach. 

    CEELM: Will you be continuing these sorts of efforts to help non-compliant firms deal with potential inspections or potential penalties?

    E.B.: Absolutely. Schoenherr will closely monitor how the GDPR is enforced in practice. We are prepared to update and alert our clients.     

    CEELM: The GDPR is really sucking the air out of the room at the moment, but are there any other issues you and your team are paying attention to right now?

    E.B.: My colleagues are paying very close attention to a recent amendment to the Czech Republic’s Public Register Act establishing a new register of ultimate, beneficial owners. The aim of the new law is to clearly disclose corporate ownership structures. Czech companies are obliged to register their beneficial owners by January 1, 2019. For trusts, the deadline is postponed until January 1, 2021.

    CEELM: Finally, if you had to give one piece of advice to clients who are only starting the process of becoming compliant now, what would it be?

    E.B.: To think about who is most likely to complain to the supervisory authority. This is a good way to prioritize what needs to be done. The Czech Office for Personal Data Protection often initiates its inspections based on a complaint.   

    This Article was originally published in Issue 5.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Change at the Top

    Erika Papp Takes Over from Gabriella Ormai as Managing Partner at CMS Hungary

    After 20 years as CMS’s Managing Partner in Hungary, Gabriella Ormai (left in photo) has decided to step down from that position, handing the office’s reigns to long-time colleague Erika Papp (right in photo). CEE Legal Matters sat down with Ormai and Papp to discuss the change.

    CEELM: Gabriella, why are you stepping down as Managing Partner now?

    G.O.: There always comes a time when you have to think about what’s next – when it’s time to move on – and I think for us this is the right moment. I am not retiring; I am just stepping down as Managing Partner. I did this job for approximately 20 years – this is something truly historic. I think a fresh eye and leadership could add real value. It has been our plan for a long time that Erika would take over one day. At the same time the office followed the standard election process established at the firm.

    CEELM: Tell us a little bit about your background. How and when did you initially join CMS, and when did you become Managing Partner? 

    G.O.: Until 1989, I had been working at the foreign currency control authority, but I somehow felt that it would not survive for too much longer. I was asked to be one of the founders of a three-person law firm. In June, with the fall of the “walls” in Eastern and Central Europe, everything changed, so it was definitely good timing. Soon after starting the practice I met McKenna & Co. and we started to work together. I was very lucky to meet that firm. Originally we had a small operation, and real growth began in 1995/1996. I became Managing Partner in 1999 when Stephen Forster went back to London.

    CEELM: What achievement are you proudest of from your time as Managing Partner? 

    G.O.: This is easy. We built up the biggest and the best firm in Hungary – and it is not just us who says this. No other law firm in Hungary has as many Band 1 rankings in the independent legal directories as we do. One of the prominent Budapest business journals, for instance, always publishes fresh rankings of the best of the best, and we are there. Of course, remaining at that position is still our biggest challenge, along with finding excellent people. We were lucky; we have great colleagues who allow and help us to grow. In 1996 we had around 10-15 employees. Today we have 70 lawyers, including 10 partners, plus other 60 to 80 staff members. 

    CEELM: If you could point to one deal or transaction CMS worked on in the past 25 years that you’re proudest of, what would it be?

    G.O.: I would say portfolio transactions. We were true pioneers in this area. When we advised AXA Bank on the sale of its Hungarian business to OTP, it was an unprecedented transaction on the Hungarian market. It involved the transfer of a sizable and complex mortgage loan portfolio, based on recent change in the law. We also assisted Erste bank on the acquisition of Citibank’s consumer business and several other high-value and high-profile transactions. 

    I’m also always proud when a client decides to work with us again after a successful transaction – and this happened with A&N Media too. We assisted them on an acquisition of a regional newspaper called Kisalfold in 1989. This transaction was the first that I did with McKenna and the seller was the Socialist party. 25 years later they instructed us on their strategic exit of leading online job and car portals as well as printing business across six CEE countries in seven jurisdictions.

    CEELM: In the past 20 years some firms have withdrawn from the market or shrunk from relevance, and others have taken their place. Erika, how has CMS managed to stay so consistently successful and prominent?

    E.P.: In my opinion, we have managed to keep our position because we are seen by our clients and competitors as a friendly law firm. We have an inclusive team, and we focus on creating and maintaining a strong cooperative relationship between lawyers in our firm. International business law is a very competitive field, of course, and it can be difficult to keep our lawyers happy and content with their careers. Gabriella has done a wonderful job at that, and I hope I can continue this tradition.

    G.O.: It is also an important factor that we are a full-service law firm, so we provide a wide range of expertise across 19 practice and sector areas, including several niche areas.

    CEELM: Erika, how would you describe your personal management style?

    E.P.: Our lawyers have different personalities, and everyone is very ambitious, so I try to create incentives by rewarding hard work and cooperation, for example, when we evaluate performance for promotions, we also take into account, apart from financial performance, soft skills such as good relationships with colleagues. We try to foster an open and inclusive work environment. I have an open door policy. This means that we keep our doors physically open all the time, making sure that everyone feels welcome to walk in anytime with a new idea, or a problem, or even just to chat. 

    CEELM: We are living in interesting times, with advances in technology and artificial intelligence transforming the market. How is CMS keeping abreast with these changes?

    E.P.: We are continuously focusing on this issue, because this is how we can preserve our position on the market. Automation, adopting new technologies, and even additional ways of specializing: we are interested in and specialized on it all. Right now we are experimenting with a lot of funky new stuff, like FinTech and Auto-Tech – we are going to give a seminar soon on Auto-tech such as self-driving cars and green energy, and the related legal aspects. So there is a large range of things that we are thinking about to keep us ahead of the game. In my opinion, this is how we can preserve our number one position: by keeping our old policies about cooperation and openness in order to attract the best talent, and by innovating in order to attract new clients. 

    CEELM: Speaking of technology, do you have any new tools that you are in the process of introducing to clients?

    E.P.: We are automating our standard agreements. In the banking team, for example, certain agreements are already automatic, we just push a button and there you go, a first draft is ready. I think this makes us competitive, because we can produce client agreements faster and cheaper than our competitors. Right now, we are working to automate other agreements as well, while trying to specialize in new areas that people don’t even know exist. 

    CEELM: Erika, you head CMS Hungary’s Banking & Finance practice, while Gabriela co-heads the Commercial and Disputes practices. Will the change of management affect in any way the firm’s focus?

    E.P.: Absolutely not. Banking in general is just one aspect at the firm, albeit an important one. As the Managing Partner, my job will be to focus on everything, not only banking. 

    G.O.: In that sense there will be no change. We have a big commercial group – which in practice includes a lot of things, like litigation, tax, public procurement, and so on. Almost half of our lawyers are in this group, so it’s a diverse team. 

    CEELM: What do you consider your biggest challenge in taking on this new position? 

    E.P.: We are in a very good position right now, and I would like to maintain it. That’s a huge challenge. Gabi did a great job with this office and I would like to keep it this way. It’s not going to be easy, as the competition is getting stiffer, other law firms are growing as well, and according to current predictions, in a couple of years we may even face another economic downturn. All in all my goal is long term sustainability and maintaining our position on the market. 

    CEELM: Gabriella, what advice would you give to Erika?

    E.P.: She actually gave me some last night, at 11 pm. She said: “Don’t be stressed, everything will be fine!”

    This Article was originally published in Issue 5.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Inside Out: Schoenherr and Freshfields Advise on Vonovia Public Takeover Offer for BUWOG

    On January 4, 2018 CEE Legal Matters reported that Schoenherr had advised BUWOG AG and Freshfields Bruckhaus Deringer had advised Vonovia SE on Vonovia’s voluntary public takeover bid of BUWOG. The takeover offer placed the enterprise value of BUWOG at around EUR 5.2 billion. We reached out to several of the individuals involved in the deal for information: Christian Herbst, Partner, Schoenherr and Thomas Zottl, Partner, Freshfields Bruckhaus Deringer 

    CEELM: How did you each become involved in this matter?

    Herbst: Schoenherr was mandated to advise BUWOG on this specific transaction. We understand from the client that BUWOG’s choice for this specific transaction was based on Schoenherr’s track record in public M&A and, specifically, the corporate M&A team’s expertise in high end takeover transactions as well as industry expertise. 

    Zottl: Vonovia SE is a long-term client of Freshfields and we have been enjoying the cooperation with Vonovia both in their home country of Germany (initially as legal advisor for Vonovia’s unsolicited exchange offer for all shares in its competitor Deutsche Wohnen AG) and abroad. Following the successful takeover and integration of Conwert in 2016 and 2017, Vonovia built on the established relationship when looking at another Austrian target, BUWOG, and called us in for support. We were of course very happy about this call.

    CEELM: What, exactly, was the initial mandate when you were retained for this project?

    Herbst: We were brought on board in December 2017 by BUWOG in connection with a potential combination of Vonovia, a German-listed real estate group. We were tasked to assist BUWOG first in negotiating a so-called business combination agreement that may be followed by a public M&A transaction, if any. Our involvement in the matter was thus from the commencement of the specific takeover transaction in December 2017, which then resulted in the public offer by Vonovia for BUWOG launched at the beginning of February 2018.

    Zottl: We were approached by Vonovia at an early stage of their internal evaluation process and commenced our work by supporting Vonovia on the feasibility review and in the initial planning phase of the transaction, working on project timelines and their structuring analysis.

    CEELM: Who were the members of your team, and what were their individual responsibilities?

    Herbst: The core members of the team were three: Robert Bachner, Sascha Schulz, and myself. Since we are all corporate M&A lawyers, we worked seamlessly as a team, with Sascha and me concentrating on the public M&A aspects and work stream. 

    Zottl: The core team for the public takeover consisted of me, Ludwig Hartenau and Thomas Mollnhuber in Austria and Gregor von Bonin, Rick van Aerssen, Andreas Fabritius, and Timo Piller in Germany. Tax, Finance, and Antitrust lawyers in Germany and Austria supported Vonovia as well.

    CEELM: Can you describe the final agreement for us?

    Herbst: Following the announcement on December 18, 2017 regarding the successful negotiation and signing of the Business Combination Agreement between Vonovia and BUWOG, valuing BUWOG at EUR 5.2 billion enterprise value, Vonovia launched a voluntary public takeover bid on February 5, 2018. The takeover offer of February 5, 2018 represents a cash offer volume of EUR 3.6 billion taking into account potential newly issued shares from a conversion of the convertible bonds issued by BUWOG. The BUWOG Management Board and Supervisory Board support the offer. The Schoenherr team advised BUWOG’s Management Board in connection with the Business Combination Agreement and has been advising BUWOG as target company on all aspects of the public offer, which is still ongoing. The initial offer term will end on March 12, 2018, followed by an additional acceptance period of three months if the offer is successful. 

    Zottl: The transaction is structured as a full all-cash takeover offer addressed to all shareholders and convertible bond holders of BUWOG. The BUWOG takeover offer is rather exceptional for Austrian circumstances as BUWOG’s shareholder base consists entirely of free float shareholders and does not include a controlling shareholder with whom Vonovia as potential bidder could have had a discussion prior to launching a bid in order to obtain control. Hence, unlike previous takeovers in Austria, Vonovia did not enter into an SPA or an irrevocable undertaking with a core shareholder. The deal documentation only consisted of a business combination agreement between Vonovia as bidder and BUWOG as target and the public offer document negotiated with the Austrian Takeover Commission which sets outs the terms of the offer to all shareholders and convertible bond holders of BUWOG.

    CEELM: What was the most challenging or frustrating part of the process?

    Herbst: The successful completion of the still-pending-since-the-takeover offer is subject to the statutory minimum acceptance threshold of 50 percent plus 1 share, the condition of antitrust clearance in Germany and Austria (obtained from filing), and other closing conditions set out in the offer documents. So, it will be clear in mid-March whether the Vonovia/BUWOG transaction has been successful. One of the most challenging aspects of the process was certainly the tight timeline under which the transaction was negotiated and the public offer was launched. BUWOG is one of the rare examples of a true free float company, since most other companies listed on the Vienna Stock Exchange have a controlling or dominating shareholder. In a “controlled” listed company, such controlling or dominating shareholder would play a key role in such transaction. In a free float company the dynamics are different with the management and supervisory boards of the target having a much stronger role in the process.

    Zottl: The transaction ran rather smoothly and quickly. As this was a “friendly” transaction, Vonovia did not want to announce the takeover offer until it had agreed on the business combination agreement with BUWOG. BUWOG was approached on the weekend before Christmas 2017 and the business combination agreement was negotiated in the course of that weekend – which gave the parties only 60 hours to come to a deal, as Vonovia wanted to announce the deal no later than on the Monday morning immediately after the weekend. We were able to deliver on this extremely short timeline because Vonovia, we, and the financial advisers were very well-prepared and interacted seamlessly.

    The legally tricky part was the fact that BUWOG had outstanding convertible bonds which could be converted into BUWOG shares at a preferred conversion rate following a change of control in BUWOG. Pursuant to Austrian takeover law, the convertible bonds needed to be part of the takeover offer. The price offered for such bonds must be adequately proportionate to the price offered for the shares. In general, Vonovia must offer the same prices (for each of shares and bonds) in the initial acceptance period of the offer as well as in the additional three-month acceptance period which is triggered if the offer is successful. To incentivize the bondholders to tender their bonds in the initial acceptance period, Vonovia offered a higher price for the convertible bonds in the initial acceptance period than in the additional acceptance period anticipating the preferred conversion rate following a change of control under the convertible bond’s terms & conditions. The price offered to bond holders in the additional acceptance period is based on the conversion rate prior to a change of control, which results in a lower price (even below nominal value), but the bondholders can convert and tender the shares received under the convertible into the offer at the offer price.

    CEELM: Did the final result match your initial mandate, or did it change somehow from what was initially anticipated?

    Herbst: Although the final result is still pending, our initial mandate did not change throughout the process and our expectations regarding our cooperation with BUWOG were met.

    Zottl: So far, the entire transaction is running as initially envisaged.

    CEELM: What individuals at your clients directed you, and how did you interact with them?  

    Herbst: The Schoenherr team worked directly with the BUWOG board and general counsel, but also with other members of the BUWOG transaction team. The working relationship has been and is excellent and it is also fun to work closely together with highly competent individuals towards an ambitious goal. 

    Zottl: Our main contact at Vonovia is Fabian Hess, the General Counsel. He is a very experienced transaction lawyer with excellent legal knowledge who always remains calm and has a very open style of communication. From our viewpoint, the working relationship is excellent – definitely one of the best clients to work for.

    CEELM: How would you describe the working relationship with your counterparts at the other firms working on the deal? 

    Herbst: The colleagues from Freshfields have been highly competent and extremely professional. The negotiations on the Business Combination Agreement were in person and intense but fair and friendly, since the transaction was structured as a friendly not hostile takeover. As is typical for such a transaction, the negotiations were conducted day and night over the weekend when stock markets were closed and needed to be finalized by Monday early morning. Following the signing of the Business Combination Agreement, and during Q1 2018, the Schoenherr and Freshfields teams worked mostly by phone and email towards the common goal; i.e., Freshfields assisted Vonovia in launching the public offer beginning February 2018 and obtaining regulatory clearances, and Schoenherr assisted BUWOG in supporting the offer and resolving any issues that came up along the way.

    Zottl: Christian Herbst and Sascha Schulz are excellent lawyers and experienced in public M&A matters. It is always good to have them on the other side of the table. They always play with open cards and maintain a direct line of communication.

    CEELM: How would you describe the significance of the deal?

    Herbst: When completed, the deal will be one of the largest public M&A deals ever in the Austrian market. Moreover, public M&A transactions initiated by a business combination agreement, securing the support by target management of the following public offer of the bidder, are a recent development in Austria. The 2017/18 BUWOG/Vonovia transaction is only the second transaction structured in such a way.  

    Zottl: This deal is indeed significant. Vonovia is listed in the DAX-30 and Germany’s leading nationwide residential real estate provider with approximately 350,000 residential units (worth approximately EUR 30.9 billion). BUWOG is headquartered in Vienna and has a triple listing on the Vienna, Frankfurt, and Warsaw stock exchanges. BUWOG is a large residential real estate company in Austria with approximately half of its portfolio in Austria and the other half in Germany. After the successful takeover of Conwert (another Austrian formerly listed-real estate company) in early 2016, Vonovia is set to become one of the biggest residential real estate providers in Austria. The offer is also the biggest all-cash takeover in Austria ever. 

    This Article was originally published in Issue 5.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Expat on the Market: Interview with Tim Pfister of Knoetzl

    Tim Pfister, Managing Partner at Knoetzl in Vienna, is an American lawyer with over 35 years of experience. In addition to his management responsibilities at Knoetzl, Pfister acts as counsel, advising clients and colleagues on New York law matters and regarding conflicts in international transactions, cross-border financings, the Foreign Corrupt Practices Act, corporate crisis management, and corporate strategic planning. He moved to Austria in 2013 and was a founder of Knoetzl in 2016.  

    CEELM: Run us through your background, and how you ended up in your current role with Knoetzl.

    T.P.: The most relevant part of my background needed to answer your question is the personal part. My Austrian wife of three years and I had been commuting between New York, where I lived, and Vienna, where she does, for several years (with intermediate stops in places like Vancouver, Hong Kong, Singapore, London, Buenos Aires, Dublin, Amsterdam, San Francisco, Tokyo, Chicago, Frankfurt, Key West, Madrid, etc., along the way) to see each other. Then, about five years ago, I suggested we flip a coin to see how we could shorten the commute.  The U.S. quarter was tossed, and it came up “Vienna.”  So, here I am.  Fairly simple, if not conventional. 

    My professional background is, in retrospect, conversely quite varied and complex – through neither previous-times expectation nor intentional design. That simply happens with the passage of decades when one is blessed with great intellectual curiosity and good health, and has serial great opportunities to practice international transactional law at an elite level, mostly in New York. So, because I’m afraid the background book is so long, it is practically impossible to encapsulate it here without curing all tendencies toward insomnia among your readers.   

    I am, by tradition and choice, a transactional lawyer who has been, over time, urged, wheedled, and cajoled by law firms to – mostly reluctantly – supplement my complex deals and corporate counseling habits by assuming a variety of firm management roles, while continuing to generate revenue. It is that latter trend that paved the way for my joining with the founders of Knoetzl, a talented and experienced group of intellectually distinguished lawyers who eschew complacency, are driven to disregard local market limitations in their practice, and measure themselves against the global elites, many of whom engage our firm as co-counsel and contributors to their major publications. The founders’ attraction for me, at the time the firm was formed a few years ago, was refreshingly magnetic, as I deeply admire the way my partners here constantly seek to raise the bar in delivering higher-quality legal representation of Austrian and international clients whose important disputes require the most exacting level of analysis and attention. So, with my long background in BigLaw practice and management, my penchant for effective legal analysis, borne in decades’ of Wall Street structured transactions, this firm’s drive and ability to do better for its clients in its market than has been done before, the lure of the challenge of guiding clients through crises – and since I was already here anyway – the fit was perfect.

    CEELM: Was it always your goal to work abroad?

    T.P.:  I never really had a “goal” of working abroad, but I also never had any aversion to the idea. In fact, over the course of my many years of international law practice, much of my focus has been outside of my native United States. I have also lived outside the U.S. from time to time, including for almost a year in Brussels, where I planted my large American law firm’s first (of what later multiplied into many) non-U.S. flags. Since many of the complex, structured financings and mergers and acquisitions deals I have serviced require – at a minimum – fitting systems (particularly legal systems and laws – but, also, cultures) together for the sake of the transactions – especially when such systems are not designed to fit together, I have always been required to “think abroad,” even if not eating and sleeping there. I enjoy what I do – and the people with whom I do it. It is fundamental in my legal analyses to understand the applicable law’s cultural and local-political underpinnings in order to dissect, work with, and sometimes refine or even help rebuild, the laws, rules and regulations that affect my multinational clients’ financial deals and businesses. Spending time away from the myopia of Wall Street, and being with an elite Austrian firm whose laser-like focus is on disputes now helps me reverse-engineer what went wrong with a deal in dispute. As a general matter, only transactions run in New York and London’s City practices can afford the enormous costs required to ensure that the lawyers can perform pervasively thorough analysis and structuring and – with critical support from top local counsel – get every aspect right.   

    CEELM: Tell us briefly about your practice, and how you built it up over the years. 

    T.P.: I have been fortunate to have started my large-firm practice at a time that had different rules and circumstances than today, and at a firm that was among the bluest of the blue chip firms on Wall Street. That meant, essentially, two critical things in terms of my own practice. First, I was surrounded by and able to learn from lawyers I came to enduringly regard as “Blow-You-Away Smart.” Being able to learn from the very best in the world, over many years, and during more working hours than any of my rational Austrian friends would care to imagine (with the conspicuous exception of my current firm’s senior, founding partner, whose legendary passion for winning her clients’ legal disputes drives her to remarkable hours, stunning successes, and associated happiness for herself and her clients), gave me a thirst for legal knowledge and analytical understanding – and a ready means to quench it.  

    Secondly, my firm was in the historically enviable position of actively discouraging its young partners from business development, as “your most important development tool is doing the work on your desk, flawlessly.” As time passed and responsibilities grew, I found myself in a position of being sought after by investment house, banking, pharmaceutical and industrial clients to run their deals and to counsel them in times of crisis. In those crises that would occasionally come along (including two which, at the time, were characterized by the press as threatening the collapse of Wall Street; they didn’t), I learned to work closely with tough and impressive litigators, and the type of dedicated and talented disputes lawyers with which I am, again, happily and comfortably surrounded at Knoetzl. 

    Over time, my energy finance deals (like the conversion of a completed, but mothballed, nuclear power plant which had been built on a geological fault into a 1278mw natural gas-fired cogeneration plant) begat more energy (and desalination) finance deals from upstream to downstream, utilizing every fossil and sustainable fuel source – and, on every continent. 

    ESOP-driven acquisitions (like a global rental car organization – later referred to by the legal press as “the Deal of the Decade in the Decade of Deals”) gave rise to structured re-financings of some of the world’s biggest corporations. U.S.-Canadian, double-dip financed roll-ups of what became, through the process, the second-largest global contract manufacturer of telecoms equipment, led to joint ventures in China, IPOs in Canada and, later, in New York and, even later, to the multi-billion-dollar sale of the enterprise itself, to that client’s largest competitor. The restructuring, refinancing and subsequent privatization of the largest airport in Poland was followed by airport finance work in Brazil, Washington, DC, the UK and the Middle East.

    Handling large-ticket legal work (co-development, co-branding, acquisitions, and spin-offs) for a famous Swedish-Swiss pharmaceutical company instigated a mandate to assist in the ultimate sale of that business (after spinning off a globally-renowned agro-biotech subsidiary) to one of the world’s largest pharmaceuticals, and to the representation the buyer of the largest publicly-traded U.S. health care operation taken over by a larger, German, life sciences company.  Restructuring an early U.S.- Russian joint venture arising out of a dispute over the world’s biggest coal strip mine operation provided my practice with assignments from various corners of the CIS and CEE. 

    Throughout, and almost since the inception of the Foreign Corrupt Practices Act during the Carter Administration, I have been called on to advise American and international companies on the Act and related laws and agencies (CFIUS, the UK Anti-Bribery Act, OFAC, etc.) regarding their structures, global sales operations, government relations, investigations, and compliance.

    CEELM: How exactly did you end up at Knoetzl?

    T.P.: The firm founders put everything together at breakneck speed once they withdrew from their previous law partnerships a few years ago. I was consulted in the early moments of the founding, and was still resident in New York during the mere hours between the founders’ respective withdrawals and their cutting the ribbon on the then-new firm. I had known the founders quite well – and many corporate and banking lawyers from one of their legacy firms – for a long time. I hired that firm and many of its partners to act as local counsel, for years, on deals with an Austrian element. I was also present at the IBA in Tokyo in 2014 when the senior Knoetzl founder, then a major (20+ years) partner at that firm, was told, without solicitation, in very clear terms by a famous lawyer (recently retired from a long career in the Magic Circle, and at the time the head of the preeminent law society in Great Britain) that her individual “brand” was considerably larger on a global scale than was that of her firm (which was, at that time, the largest in the region). I had no doubt that he was spot on in his observation. So, much later, when I was asked to help elevate Knoetzl to their targeted higher standards, I wasted no time in rolling up my sleeves. 

    CEELM: What do your clients appreciate most about you?  

    T.P.: This is an interesting question. Although I am fairly confident that they generally enjoy my company personally, as one can generally tell from after-hours gatherings, I have fewer reasons to know what, specifically, clients appreciate in a way that is distinct from their appreciation of other lawyers. Of course, they like results. Nevertheless, two statements made by clients come to mind. The CEO of a global consulting firm once said that, although technical, flawless,  legal skills are expected from the senior lawyers to whom he pays very high hourly fees, he liked to engage my team, also, for my business acumen – an understanding of the commercial and financial drivers of his firm’s legal matters. 

    When I train young lawyers, I often admonish them that we are charged with knowing more about a client’s deal, or business, or dispute, than the client itself knows. Only then do we earn our keep and help them prevail. 

     

    Another client, the general counsel of a large financial services organization for whom we were celebrating a massive, multi-continental transaction in Hong Kong, was asked by the business woman in charge of the deal what it is that makes him (the GC) say that my firm at the time was the best group of lawyers he knows – as she confessed to not knowing enough about distinguishing between legal services providers. His response was telling. Although himself a highly credentialed and accomplished lawyer, he said that “I have known Tim and [my partner back in New York to whom we turned for help in the middle of his night whenever we got stuck during the previous two weeks of negotiating with over 20 parties] for a long time and, human nature being what it is, I’m sure that I’ve asked a lot of stupid questions. Yet, neither of them has ever made me feel that way. Instead, they always look behind the question to see what is really bothering me, without regard to how the concern was phrased, and they work through the resolution of whatever was really troubling me.”

    CEELM: Do you find Austrian clients enthusiastic about working with foreign lawyers, or – all things considered – do they prefer working with local lawyers?

    T.P.: Again, this is difficult to know. My direct client dealings are, in the lion’s share, with international clients of Knoetzl. I have not sensed a hesitation on the part of Austrian clients to deal with a helpful “Auslander.” But, my sample size is too limited to enable me to truly know. One interesting aspect of this, however, is that it is quite clear that more sophisticated Austrian clients are coming to understand that they can enjoy a considerable advantage in their disputes arising out of agreements when they are represented by specialist disputes lawyers, rather than by the same general or corporate lawyers they may have used in all their matters – including those who put the disputed deal together.

    CEELM: There are obviously many differences between the Austrian and American judicial systems and legal markets. What idiosyncrasies or differences stand out the most?  

    T.P.: Two areas of difference jump out. One, as Knoetzl is a disputes firm, and I fancy myself to be something of a student of the systemic differences, I have come to understand and appreciate the fundamental distinguishing aspects between Anglo-American common law systems that permit pretrial discovery, and the Austrian civil law system where discovery (in civil cases) is mostly prohibited, allowing the matter to go to trial much sooner. Furthermore, Austrian judges rely heavily on court experts, a system that is unknown in American courts, where only judges and juries determine the factual aspects of the matter. These approaches and their differences cannot be overstated, and would be the subject of a whole, different article or tome. Having studied the vast dissimilarities in these approaches, I cannot conclude which is better. Each has big advantages, and each has big, consequential failings. 

    The second, and unrelated, difference that comes to mind is how Austrian legislators seem to be far less interested in promoting or enabling business interests or entrepreneurship [than many other countries], and, conversely, are driven by different social-engineering goals than are governments that actively promote such interests in their countries. 

    CEELM: How about the cultures? What differences strike you as most resonant and significant? 

    T.P.: I think the most resonant cultural difference between Austria and the U.S. is reflected in the last half of my response to legal systems differences above. The government in Austria – irrespective of which color or combination of colors is in charge – seems to set a tone that lowers the ceiling for businesses, instead promoting more mediocre jobs that, individually, are considerably more expensive for companies to provide than are higher quality, but fewer, entrepreneurial jobs and career-and-market-growth opportunities that are encouraged elsewhere. The result is a seemingly intentional dampening-down of business drive or ambition. 

    This is not new. Several years ago, when I was involved with rollups and consolidations of stock markets in places like New York, London, Frankfurt, and Stockholm, I asked my exchange clients why they hadn’t considered approaching the Vienna exchanges, as it seemed to my untrained eye that connection to world markets by the SEE and CEE regions was far more historically and culturally logical through Vienna than, say, through London, or Berlin, or Stockholm.  But, the disinterest I encountered in response, seemed to result from the pervasive dampened-down business environment.

     

    Today, with Brexit well underway, this American expat watches in amazement as the Austrian government simply sits on the sidelines and seems to fear competing to take over as the new home for any of the European, neutral, non-political, institutions that will have to move out of the UK, and looks on as cities no more logical or qualified fight tooth-and-claw for these business-generating plums. 

    The multiplier effect of this is also the underlying reason the large local law firms here do not get the opportunity to handle truly large-market deals, and thereby build upon a store of knowledge and skill set that such deals in New York and London demand. But in everything there is good news! The hourly rates charged by top M&A and finance lawyers in the Austrian market are just a fraction of those charged by their counterparts whose deals are for, and supported by, the big capital markets. And, for Austrian law firms that are focused on sophisticated litigation and arbitration matters, our post-M&A and financing disputes practices thrive! 

    CEELM: Outside of Austria, which CEE country do you enjoy visiting the most?

    T.P.: The way you ask this question – suggesting that a single country in the region trumps all others – is impossible for me to answer. I have a significant, heart-felt, professional relationship with Poland, and have both represented Polish interests, and used Poland as a shining example of a country’s getting up to speed in a market economy after a long period of absence – in lectures I’ve given at law schools and to international lawyer and business groups for years. I went through a period of assisting US investors who – at the time – moved quite enthusiastically into Hungary, and my visits there are always delightful. I enjoy the sea and the people of Croatia which I came to know well in former days when I had to get my passport stamped regularly. Of course, Prague and smaller cities in the Czech Republic are magical places I would visit for the beer alone!  Our firm’s services – particularly in our arbitration practice – are called upon routinely in Bulgaria, Romania, Slovakia, and Slovenia, so they are all on my short list of places in which I need to spend more time. 

    CEELM: What’s your favorite place to take visitors in Vienna? 

    T.P.: Finally, an easy one! Whenever the weather is accommodating, I love to show our international visitors the 360 degree views of Vienna from our firm’s client spaces in the very center of this incredible and historic city, and then whisk them away for a wonderful food, beer, and cultural experience at the Schweizerhaus in the Prater. After years of giving in to the wishes of foreign visitors to go to a New York steak house (any one), my move to Vienna has given me a much-improved option in this regard! 

    This Article was originally published in Issue 5.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Expat on the Market: Interview with Patricia Gannon of Karanovic & Nikolic

    Patricia Gannon is a founder and Senior Partner at Karanovic & Nikolic, where she focuses primarily on the management, business development, strategy, and expansion of the firm. Gannon qualified as a Solicitor in Ireland and after a short period working at the European Commission in Brussels she moved to Serbia and founded the firm. She is a committed advocate of corporate philanthropy, and was amongst the founding members of the Serbian Charity Forum, an umbrella forum of leading foundations in the country.

    CEELM: Run us through your background and how you ended up in your current role with K&N.

    P.G.: Well, lets just say that living in Belgrade was not in my life plan when I was back at law school in Trinity College in Dublin. Yugoslavia was a place and concept very far away from Ireland in the 1990’s. It still is – but I have managed to transition and evolve into a person very content in multiple places. 

    Even in law school, I was interested in international law and working with people culturally different from me. I was very active in the European Law Students Association and served as President of that organization and finally ended up elected to the International Board located in Brussels for a year. At the same time, I worked in the European Commission – at that time in DG XI (today’s DG Environment) – where I got to see firsthand how that institution defended implementation of the Directives throughout the Union.

    I completed my formal training as an Irish Solicitor and ended up moving to Serbia for personal reasons back in the Milosevic era, a time when more people were trying to leave the country rather than move to it. I had qualified at a top- tier Irish law firm and really enjoyed M&A and inbound investors coming into Ireland back then and saw the opportunity to develop a European style law firm in the Balkans.

    Almost 23 years later, after war, bombing, sanctions and the birth of new states after the collapse of Yugoslavia, I spend much of my time working throughout the region to develop the firm. This year I am the Chair of the European Forum of the International Bar Association so that takes up quite a bit of my time too – managing all the events in Europe together with my IBA Officers.

    CEELM: Was it always your goal to work abroad?     

    P.G.: Yes it was, as I really enjoy travel and new languages, cultures, and people. In the business world, I find it fascinating how, despite all the globalization that has taken place, people still ignore the cultural implications in negotiation and business and are surprised at how different things are from how we do them “back home.” This has been particularly evident in terms of perception of the Balkan region, where I still spend a lot of time trying to make sure foreign investors understand the context of the economy they are investing in and the history and society they will be working in. The situation is significantly better than it was when I first came to the region, and my view is that as long as we stay out of the international news for negative political reasons, we see more positive effects on the economy as more foreign investors some in.

    CEELM: Tell us briefly about your practice, and how you built it up over the years.

    P.G.: Well, my personal experience was in the Corporate and Banking spheres but my role today really has been in management, strategy, and direction. Clearly by coming to the Balkans, I had the chance to become the entrepreneur that I am as there was no other way to use my skills other than by establishing my own firm. Together with Partners Dejan Nikolic and Dragan Karanovic, we grew the firm initially out of the early stage privatizations in Serbia. Working with the World Bank initially, we sold groups of companies in strategic sectors as the economy was opened for new investment after Milosevic. These large projects required a number of lawyers to work together, and the work allowed us to grow quickly. Introducing specializations and a department structure first in the market allowed us to cross-sell services to existing clients and develop new clients looking for a more specialized type of lawyer. It also allowed us to grow again. The next obvious step was to develop services in new markets where clients were looking for a team of lawyers who understood their business and could deliver top quality service efficiently.

    The rest, as they say, is history, and today I am proud of the solid brand we have built and the excellent committed people we have who work for it. That is more my inspiration now and I spend quite a lot of my time mentoring and motivating young lawyers. 

    CEELM: What do your clients appreciate most about you?  

    P.G.: I am known for being direct and sometimes that can be a challenge for people around me but certainly foreign clients really appreciate a frank and transparent view of the situation they are in and how best to resolve it. The fact that I have over 20 years experience in multiple markets gives me an overview which few have.

    CEELM: Do you find Serbian clients enthusiastic about working with foreign lawyers, or – all things considered – do they prefer working with local lawyers? Is that true across the Balkans?         

    P.G.: As we look to the future and possible European integration, I believe we need to embrace others different from ourselves – and this is also the case with legal experience. I firmly believe that we all have much to learn by working with foreign lawyers who share their experience with us and as such favor the more liberal end of our profession. Particularly today, the one thing we can be sure of is change, and I encourage practitioners everywhere to try to embrace it rather than deny it. In the Balkans, lawyers feel that we are behind the curve of change, but if our clients start to expect more efficiency from lawyers we will have to adapt to their needs. I think that in time we will see a greater opening up of the profession as that will be what clients are looking for.

    CEELM: How about the cultures? What differences strike you as most resonant and significant between Ireland and Serbia?    

    P.G.: To be honest, I often hear about how similar both cultures are but I think what we have in common is an appreciation of going out, drinking, and having fun. Even in the dark days of Milosevic I was always impressed at how young people tried to live a “normal” life and went out all the time. Ireland is a small country at the periphery of Europe and Serbia is geographically located between East and West so our views on the world and our histories have been quite different. Although the Celts moved through here thousands of years ago, the Balkans had many more invaders than Ireland did and that has an impact on the Balkan view of life I think.

    CEELM: What particular value do you think a senior expatriate lawyer in your role adds – both to a firm and to its clients?  

    P.G.: The role is quite interesting and defines the firm’s approach to collaborating with different cultures. It’s one of our core values. I bridge ideas and opportunities and cultures in a way and its been very helpful to everyone. Having so much experience across the region gives me a broad overview and for newcomers to the region this is a comparative advantage. I am luckily at the stage of my career that I get to select more carefully how I can best contribute to the growth of the firm and promoting the region internationally more is clearly a key part of that. With respect to clients I work more on bringing them in and my colleagues take over the relationships then so we all do what we are best at doing. 

    CEELM: Outside of Serbia, which Balkan country do you enjoy visiting the most, and why?         

    P.G.: I am very lucky to travel within the Balkans all the time and enjoy the best that each country has to offer. Right now I am based in Ljubljana and enjoy life in a smaller city which has wonderful infrastructure and cute places to go out. I get to visit Bled or Bohinj for the weekend. In Croatia, nothing beats the coast in summer, although Zagreb can be very quiet as a result. I make a point of visiting Sarajevo at least during the buzzing film festival which I encourage people to do – really a wonderful place and people! I really enjoy the Montenegrin coast off-season, in September, when the water is still warm and there are no crowds, and I always try to get to Skoplje for the jazz festival at least. The entire former Yugoslavia has so much to offer. People are always surprised by it and even after all these years being here I enjoy the edginess of these peoples.

    CEELM: What’s your favorite place to take visitors in Belgrade?    

    P.G.: It really depends on who the visitor is and their age. For older visitors it feels like there is less cultural stuff to visit – limited museums, galleries, and the like – but the overall ambience of the place appeals to people. For younger people it is fast becoming a party capital in Europe. Like most, I make a point of being by the rivers as much as I can. I try to do my morning walk by the Danube and end up in one of the many Beton Hala resturants every week. For night life, places like Mladost, Ludost, and Radost (and finally Gadost for the after party) are perfect for different music and the local scene.   

    This Article was originally published in Issue 5.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Expat on the Market: Interview with Ana Radnev of CMS

    CMS Partner Ana Radnev has a unique profile. Born and educated in Romania, joined CMS in Bucharest, then moved first to the firm’s London office (during which time she became English law qualified), then to the firm’s office in Prague. Since 2013, when CMS opened its Istanbul office, Radnev has divided her time between the Czech Republic and Turkey.

    Radnev works within CMS’s International Banking and Finance team, where she acts for sponsors and lenders on complex structured multi-jurisdictional financing transactions in Turkey, Central and South-eastern Europe, and the Baltic countries.

    CEELM: Run us through your background, and how you ended up in your current role with CMS.     

    A.R.: I am a CMS lifer, having joined the firm’s newly opened Bucharest office in my last year of university more than 15 years ago (not wanting to give away my age!). The late nineties and early 2000’s were a very exciting period, the time of privatizations and of the first private equity investments. It was a great learning experience and a great team. 

    As CMS grew larger in Romania, I moved to the firm’s banking team in London for a few years. During this time I re-qualified as an English solicitor and focused on my banking practice. This was another interesting time, the boom of large leverage deals before the Lehman crisis. 

    The move to London was always intended to be a preparation for my return to CEE so the next stop was Prague, from where I have been working on cross-border transactions across the region. At the time I was a bit of an unusual apparition – an expat from the East! However, my Czech colleagues quickly adopted me and I can now mountain bike, cross-country ski, and appreciate a good beer!  Unfortunately, despite growing up watching Czech TV programs (the unforgettable Arabela), I did not seem to have picked up much useful Czech and this remains a struggle – matched only by the difficulty of the Turkish language!  

    I have been working on transactions in Turkey for quite a few years and the launch of the CMS Istanbul office was the opportunity to consolidate that. Since then I have shared my time between Prague and Istanbul. Helping building our brand in the Turkish market and working closely with our local banking team on cross-border finance deals has been really exciting thus far. 

    CEELM: Was it always your goal to work abroad?  

    A.R.: I never planned to emigrate. I have an older sister who left Romania before 1989 and I believe the family plan was to follow, however, as times changed I grew up in a very vibrant and changing country, and while I loved traveling I did not feel the urge to leave for good. It was all supposed to be temporary … and yet here I am. I have strong bonds to Romania and I still think of it as home. It is a great place and a place I belong and where I have roots. 

    CEELM: Tell us briefly about your practice, and how you built it up over the years.  

    A.R.: My practice focuses on international structured event-driven or sponsor-backed transactions and it is quite evenly split between borrower and lender work. I have been very fortunate to have great mentors from the day I started working, including Simon Dayes (now head of our Romanian banking team) whom I first started working for when I was 19 and whose mentoring and guidance in those formative years were essential and put me on my tracks, and then Paul Stallebrass, who involved me early on in transactions, mentored me, and supported me in developing further. My private equity colleagues have also been instrumental in their support and help in developing the leverage finance practice.   think a good practice is a team effort.

    CEELM: What do your clients appreciate most about you?  

    A.R.: Aside from knowing my stuff? My commercial and pragmatic approach and (I would like to think) being easy and fun to work with. 

    CEELM: Do you find Turkish clients enthusiastic about working with foreign lawyers, or – all things considered – do they prefer working with local lawyers?

    A.R.: Turkish clients appreciate the expertise and the ability to draw on experience built in other jurisdictions. As a foreign lawyer however I think one should also understand the times when it is best to step back. Again, it is a team effort.

    CEELM: There are obviously many differences between the Turkish and Romanian judicial systems and legal markets. What idiosyncrasies or differences stand out the most?  

    A.R.: I am each time surprised by the similarities. Both jurisdictions are codified and inspired on traditional systems and both can be quite formalistic. As Turkey started to update some if its laws it reminded me of similar times in Romania. What is absolutely admirable in Turkey is the development in PPP legislation which supports the development of PPP projects and bankable documentation. I wish I could see more leveraged transactions so we can have more fun with financial assistance provisions!

    CEELM: How about the cultures? What differences strike you as most resonant and significant?

    A.R.: I have always been fascinated by and in awe of Istanbul’s cultural and historical significance. At the same time it reminds me of home and I feel at home – there are so many words of Turkish origin in Romanian – many connected to food. I like the street sounds, the bustle, the people, and the food (a lot!). I still get asked about Hagi when I go through passport control.  My colleagues there are a great bunch; they have taken me under their wing and make me feel local.

    CEELM: What particular value do you think a senior expatriate lawyer in your role adds, both to a firm and to its clients? 

    A.R.: I don’t think of myself as an expat particularly. One of CMS’s core values is being international. While a strong local practice is essential, it needs to function as part of an international operation mindful of what happens around to be able to guide our clients through a global business environment.

    CEELM: Outside of Turkey, Romania, and the Czech Republic, which CEE country do you enjoy visiting the most, and why?    

    A.R.: I am a true child of the Balkans (I am Romanian, I have a Bulgarian name, and I work in Turkey) and I like the diversity that CEE brings. I think one of the best parts of what I do is that I have the opportunity of working with people in so many jurisdictions, and I think that having this experience and being able to bring it all together to have a regional overview but also understand local subtleties and culture is what makes a difference.

    CEELM: What’s your favorite place to take visitors in Istanbul? 

    A.R.: Hard to choose, I like Karakoy for both art and food.  I love the Contemporary Art Museum and I like Karakoy Lokantasi (but then again who doesn’t), and Mete and a couple of other places. Ortakoy is another favorite area, and now that the mosque restoration has been finished it is even more splendid. I like the fish restaurants on the Asian side, I am dreaming of a mountain of hamsii (it’s the season when they are nice and plump) and I like the historical part. I like modern Istanbul too, it’s fun and vibrant. I am a very keen skier and am planning a skiing trip (you can heli ski in Turkey)!  And did I mention that shopping is great?   

    This Article was originally published in Issue 4.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Expat on the Market: Interview with Rita Ran Pang of Kinstellar

    Rita Ran Pang is a Chinese-qualified lawyer and a member of Kinstellar’s business development team, focussing on the Chinese market. Before joining Kinstellar in Prague, she worked for a Chinese law firm in Shanghai for five years, where she focused on foreign investment, cross-border transactions, merger & acquisitions, and outbound investment.

    CEELM: Run us through your background, and how you ended up in your current role with Kinstellar.

    R.P.: I’m a lawyer 100% made in China! I studied, lived, and worked in Shanghai. I moved to Prague ten months ago and landed with Kinstellar as an associate, focusing on maintaining and developing Chinese-related investment across Kinstellar’s ten markets.

    Yes, I moved to another country, from China to the Czech Republic! People do this most likely for one of two reasons: you need a change in your life and love to travel, or you fell in love. Well, I have both. I fell in love with a charming man next to me during the flight from Shanghai to Prague, on my first trip to Prague. The timing was perfect as I had just resigned from my previous job. After spending some time together, I made the bold decision to move to Prague.

    I was fortunate to be introduced to Jason Mogg, Senior Partner at Kinstellar and I subsequently survived interviews with ten partners from different countries. The process showed me how Kinstellar takes things seriously as well as the effort it puts on China-related business development. Kinstellar is a great firm for me to start my new professional life.

    I always believe you should work for somebody who values your talents, hard work, and loyalty. This is exactly what Kinstellar offers me! Also, these are the qualities of my colleagues!

    CEELM: Was it always your goal to work in Europe?      

    R.P.: Yes. My original plan was to work for another four or five years in China and then move to Spain as I love the Spanish language. But you can never plan your life as it is full of surprises! I have to admit, it has been a good decision to settle down in Prague, and with Kinstellar.

    CEELM: Tell us briefly about your practice – your role at Kinstellar. What is it, exactly?     

    R.P.: As you know, law is jurisdictional, though the concept would be the same. As a result, I cannot practice here. I am dedicated to supporting firm-wide business development focussed on the Chinese market by helping the firm develop, refine, and execute its business development strategy for the Chinese market, as well as project managing on China-related matters.

    CEELM: What do your clients appreciate most about you?   

    R.P.: I would say that I am responsive, positive, open, hardworking, and stand my ground. In the words of one of my clients, “though she is young, she stands by her views when being questioned by senior lawyers.”

    CEELM: There are obviously many differences between the European and Chinese judicial systems and legal markets. What idiosyncrasies or differences stand out the most?    

    R.P.: The legal system in most CEE countries is a civil law system, which is the same in China. However, differences do exist. One thing I want to highlight is timing: In certain ways, China is a highly-controlled country. Multiple approvals/filings are required from different authorities in terms of outbound investments, which can take weeks. Sending funds out of China also requires the blessing of the foreign exchange authority. In addition, if the company is state-owned, a green light from the ultimate shareholder is required. Together with typical Chinese negotiation tactics, the process is often very slow. Sometimes, this can be a deal breaker. 

    While in most CEE countries, it would not involve such a complex approval/filing process. 

    CEELM: How about the cultures? What differences strike you as most resonant and significant?   

    R.P.: Not that many. Czechs look more serious and behave in a more direct way. The trust-building process is relatively fast despite the different cultures. I believe it would be the same case across other CEE countries. Chinese are generally more sensitive and less direct in their manner.  When dealing with Chinese investors, having another Chinese face on your team helps considerably in making the clients relax and feel reassured.  

    One common thing I believe Czechs – and people in most CEE countries – share with Chinese is that we are all hard-working and driven and want to develop our professional careers.  

    CEELM: Do you plan to return to China at some point?    

    R.P.: I have no immediate plans to return to China. There is so much to explore in CEE/Europe.  

    CEELM: Outside of the Czech Republic, which CEE country do you enjoy visiting the most, and why?     

    R.P.: This is a tough question, as I enjoy traveling. It is a learning process and I always get inspired by my travels to different countries and different nations.

    Slovakia: Nice people, cozy environment, and robust economic growth. Hungary: a perfect combination of a dynamic business environment and serious people. Serbia: a hub for major Chinese state-owned enterprises spreading business in CEE, and a very pro-Chinese society. Croatia: unforgettable amazing strawberries as well as a beautiful countryside.

    CEELM: What’s your favorite place to take visitors in Prague?

    R.P.: I have two places where I visit at least once a week. The first is Nase Maso – in English, “Our Meat.” It is actually a butcher shop but a very good place for a great meal. Not only because it has the best beef tartar in Prague, but also because of the people working there. They are positive, caring, and energetic. You can feel their passion and love for their job and customers. They continually remind me of the attitude I should always have and what my colleagues have already had – do what you love and love what you do! Plus, people there know me well, and make me feel at home. 

    The second is Vysehrad – in English, “Upper Castle.” It is a quiet place where you can enjoy the sunshine during the weekend or have a beer with your friends after work. The most important thing is, it is not crowded.   

    This Article was originally published in Issue 5.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Expat on the Market: Interview with Bruno Leroy of Leroy si Asociatii

    French lawyer Bruno Leroy is the Founding Partner of the highly-regarded Leroy si Asociatii law firm in Bucharest. Leroy, who is a member of the Paris and Bucharest Bar Associations, has been working in Romania for almost twenty years, specializing in M&A and real estate transactions and on sensitive European law and competition matters.

    CEELM: Run us through your background, and how you ended up in your current role.  

    B.L.: I started my career in Paris, in 1994 after becoming a member of the Paris Bar Association, working for the renowned international law firm Gide Loyrette Nouel. After four years, I was asked if I would be interested in relocating to become Head of the Bucharest office of Gide Loyrette Nouel as the firm was expanding its presence in South East Europe.

    At the time, I didn’t know much about Bucharest or Romania, but I must admit I was curious. The first step was to take a trip and see exactly what I was dealing with, and to my surprise I fell in love immediately with the people, the country, and the culture. Bucharest and Romania were going through major changes in 1998 and the business environment was thriving. It was the right place to be and the right time. 

    Over the years, I have advised on the most significant projects in Romania, including headline M&A and real-estate transactions and sensitive European law and competition matters, and I have worked with large European Groups on the privatization of Romanian state-owned companies.

    In 2004 I was named Partner and continued to lead the Romanian Gide team until 2014, when, together with my Partner Andreea Toma, I took over the office and created Leroy si Asociatii.  

    CEELM: Was it always your goal to work abroad?   

    B.L.: I can’t really say that my goal was to work abroad but when I received the offer to move to Bucharest, my wife and I immediately accepted it and saw it as an opportunity to discover a new culture and a new environment, which was very exciting. 

    CEELM: Tell us briefly about your practice, and how you built it up over the years.     

    B.L.: Over the years we have witnessed constant growth, both in our customer portfolio and in our level of fees.

    The early 2000s were booming years for the Romanian market, a period of restructuring and constant development. Back then we were mostly advising French clients, as a result of our origins, but in recent years and since Leroy si Asociatii’s inception in February 2014 our practice has continued to grow at a fast pace, and we have strengthened our relationships with our clients while at the same time growing our new business. Now we are proud to say that we have clients from all over the world, including Germany, Italy, the UK, Turkey, and the USA.

    M&A, Banking/Finance, Competition, Distribution and Consumer Law, and Energy are the top sectors in our business. We also advise on Real Estate, Intellectual Property & Data Protection, Employment, Dispute Resolution, Projects & Infrastructure, and Insurance & Aviation. Over the years, we have been involved in some of the largest national and multi-jurisdictional deals and projects and we are renowned for our unique understanding and knowledge of the Romanian legal marketplace.   

    As a result of our constant growth we started 2017 with the announcement of two new partners, Cristina Togan and Eleonora Udroiu, who are highly recognized lawyers with extensive experience in business law. 

    CEELM: What do your clients appreciate most about you?  

    B.L.: My fees! More seriously, I believe they value the fact that I am available and receptive and that I thrive in my discipline without any sort of arrogance. They also appreciate my involvement in any issues I’m dealing with or with any case I’m working on. 

    Plus, our dedication as a team to delivering excellent legal advice, our attention to each and every detail, our proactive ways, and of course our innovative thinking. Next to that we have always built relationships with our clients, focusing on a partnership and on an ongoing connection rather than on isolated projects.

    I consider most of my clients my friends and I value them as both individuals and professionals.

    CEELM: Why do you think your personality and skill set has fit in so well in Romania? How have you succeeded in Romania as a foreign lawyer, when so many others have not?  

    B.L.: I consider myself as an open-minded person with strong communication skills and with the ability to respond quickly to changing circumstances while at the same time dealing with people from different backgrounds. This has certainly helped me to settling in much easier in Romania. 

    I was greeted with open arms from both a personal and a professional perspective.

    CEELM: If your long-term clients were asked to describe your personality, how would they do so?

    B.L.: I believe (and hope!) they would describe me as loyal, hardworking and humble. 

    Also, I would like to think they would also describe me as a friend, as I have mentioned before, as I value greatly the relationships we have with our clients, thus my constant effort to deliver excellent legal advice. And of course every business relationship is based on a personal one as well.   

    CEELM: There are obviously many differences between the Romanian and French judicial systems and legal markets. What differences stand out the most?    

    B.L.: Both systems are actually quite similar, especially in regard of the civil code and EU law compliance. The real differences mainly lies behind the history of the country and the still weak jurisprudence level in Romania. 

    CEELM: How about the cultures? What differences strike you as most resonant and significant?     

    B.L.: It’s true that both cultures are different and both have their particularities – although both are Latin. I would say that Romanian people are extremely open-minded and welcoming whereas French people are slightly more difficult to approach and share with. 

    A huge difference in my opinion is how both cultures deal with success and recognition. In Romania, people who succeed are highly recognized and appreciated for what they’ve done and can be proud of their achievements. In France, however, people are afraid to talk about their success and might even feel ashamed of it. This has nothing to do with the fact of remaining humble, which I think is very important. There is just a lot of judgment going on in France, and this is not a principle with which I identify.  

    CEELM: Outside of Romania, which CEE country do you enjoy visiting the most, and why? 

    B.L.: For business purposes, I would say Bulgaria. Otherwise, I would definitely visit Slovenia in order to spend some quality time in the mountains.

    This Article was originally published in Issue 4.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Inside Out: The Mavi IPO

    The Deal: On June 20, 2017, CEE Legal Matters reported that the Esin Attorney Partnership and Baker McKenzie had advised Turkven Private Equity, the Akarlilar Family, and Mavi Giyim Sanayi ve Ticaret A.S., the Turkish jeans and jeans-wear company, on Mavi’s IPO, with White & Case advising underwriters Bank of America Merrill Lynch, Goldman Sachs, and Is Yatirim. 

    We reached out to the partners of the Esin Attorney Partnership and White & Case who led their firms’ teams on the IPO for more information.

    The Players:

    • Counsel for the Issuers: Esin Attorney Partnership: Muhsin Keskin, Partner at Head of Capital Markets
    • Counsel for the Underwriters: White & Case: Derin Altan, Istanbul Local Partner

    CEELM: Muhsin, how did you and the Esin Attorney Partnership/Baker McKenzie become involved with Turkven Private Equity, the Akarlilar Family, and Mavi Giyim Sanayi ve Ticaret A.S. on this matter?

    M.K.: In the beginning, this was a dual-track transaction. In other words, the client pursued the trade sale and IPO simultaneously, but decided on the IPO. I think they mandated us for the strength of our corporate finance (M&A and equity capital markets) practice. We assisted Turkven with strong teams in both work streams.  

    CEELM: Can you clarify who you were retained by initially?

    M.K.: There was an RfP and beauty contest process. Turkven evaluated our offer and credentials and selected us. This was Turkven’s first IPO but they already knew us and had worked with us on the M&A market and they also knew how strong we were on ECM deals. When they decided to proceed with the IPO route, we also advised the issuer (Mavi) and the other shareholder (the Akarlilar family).

    CEELM: How about you, Derin? How did you and White & Case become involved with Bank of American Merrill Lynch, Goldman Sachs, and Is Yatirum on this matter? 

    D.A.: We were selected as the underwriters’ counsel when the joint global coordinator was appointed. This was before the kick-off of the transaction. We received an RFP from our clients on this deal. The banks reached out to us directly, in particular Goldman Sachs, which was mandated first. We – including me personally – have worked with them before, in many jurisdictions.

    CEELM: For our readers who may not be familiar with the process, Muhsin, were you involved in the process of selecting the underwriters and lead arrangers, or did you come on board afterwards?

    M.K.: Generally, the lawyers’ mandates follow the banks’. It was no different in this case.

    CEELM: And what about you, Derin? When did White & Case get involved?

    D.A.: Similar to all IPO transactions, we were not involved in the selection process of the underwriters and we stepped-in once the underwriters were selected.

    CEELM: What, exactly, was your initial mandate when you were retained for this particular matter? 

    M.K.: To represent Turkven in the trade sale and then represent Turkven, the Akarlilar Family and Mavi in the IPO.

    D.A.: We were retained as the underwriters’ counsel. The mandate was in line with customary UW counsel role for Rule 144A ECM deals.

    CEELM: Who were the members of your teams on this deal, and what were their individual responsibilities?

    M.K.: This was a multi-jurisdictional deal led by me and Esin Attorney Partnership Partners Eren Kursun (Head of M&A and PE), Erdal Ekinci (Head of Tax), and Birturk Aydin (Head of Compliance). We were supported by Associates Caner Elmas, Gunes Helvaci, Sertac Kokenek, Berk Cin, Sait Baha Erol, Erdi Yildirim, Sena Uralcin, and Sena Calın.

    The Baker McKenzie team included Partners Mark Devlin and Nikolaus Reinhuber in Frankfurt, Marcel Janssen in Amsterdam, Michael Fieweger in Chicago, Sergei Voitishkin in Moscow, and James Thompson and Nick O’Donnell in London. They were supported by Of Counsel Ross McDonald in New York, Valesca Molinari in Frankfurt, Kim Stouffer in Toronto, Rochelle McAllister in Chicago, Sergey Kapustin in Moscow, Gerard Koster in Amsterdam, and Tom Quincey in London. 

    D.A.: Laura Sizemore led the deal on the international side, with Henrikki Harsu assisting as the US associate. In Turkey, I led the team, with Ece Kuregibuyuk assisting.

    CEELM: Please describe the IPO in as much detail as possible, particularly from your clients’ perspectives.

    M.K.: The offering consisted of an international offering of 16,624,300 shares by Blue International Holding B.V. outside of the United States and Turkey to institutional investors in offshore transactions and to qualified institutional buyers in the United States and a public offering of 7,124,700 shares to retail and institutional investors in Turkey in offshore transactions. 

    The selling shareholder sold 3,562,350 additional shares to cover over-allotments. Based on the offer price, Mavi’s total market capitalization at the commencement of trading was approximately TRY 2.14 billion. 

    The shares began trading on the Borsa Istanbul on June 15, 2017 under the symbol “MAVI.” With a market capitalization of TRY 2,135,300,000 (TRY 43 per share) and an offering of 27,311,350 shares, Mavi’s IPO is the largest in Turkey since 2013.

    Turkven and the Akarlilar Family hold around 45% of the company post-IPO (1/3 of which belongs to Turkven and the rest to the family). Before the IPO Turkven was the majority and the family was the minority.

    D.A.: The deal is of particular interest to our clients as it closed as a huge success.

    CEELM: What was the most challenging or frustrating part of the process? Why?

    M.K.: The deal was challenging in a couple of aspects. The initial plan was to IPO Mavi based on the Q3 2016 financial results. Due to the global political instability following the US elections and its effects on the Turkish economy (including the devaluation of the Turkish lira), the deal was suspended in December. When the economy began to recover in March 2017, the client decided to restart the process based on the year-end financials, which left us very limited time and was our greatest challenge.

    We organized a large team of lawyers in several jurisdictions due to Mavi’s group structure and the extent of their international operations. It was quite challenging to streamline the information flowing in from various jurisdictions.

    I would like to stress the original dual-track nature of the transaction. When a client is unsure of which direction to take at the outset, the lawyer’s job can be difficult. An IPO timeline is dictated by strict regulations whereas a trade sale is very open-ended, making it difficult to conduct both processes simultaneously.  

    D.A.: Although I have some insight, I would refuse to comment on this for obvious reasons. I am a capital markets lawyer, and this is our job. There are frustrating parts, but the deal closed; which is enough to compensate for all difficulties, challenges and frustrations. It is a deal that we work so hard on but does not close that would be frustrating.

    CEELM: Was there any part of the process that was unusually or unexpectedly smooth/easy?

    M.K.: No. Turkish IPOs are always challenging.

    D.A.: Not really. This deal was the first major IPO after certain structural changes to the regulator and regulations, which is always challenging. Looking back, I cannot remember any part that was “unusually smooth.”

    CEELM: Did the final result match your initial mandate, or did it change/transform somehow from what was initially anticipated?

    M.K.: The result matched the initial mandate. 

    D.A.: We were in line with our mandate.

    CEELM: What individuals at your clients did you work with, and how did you interact with them?  

    M.K.: Our main contacts were Baris Seven and Kerem Onursal from Turkven, who acted as the global deal coordinators. We also interacted with Tuba Pekin, Mavi’s CLO, and Tuba Yilmaz, Mavi’s CFO, and their respective teams to combine the disclosure documents.

    D.A.: We had daily interactions with the bankers at Goldman Sachs, Bank of America Merrill Lynch, and Is Yatirim. We also worked closely with Mavi CEO Cuneyt Yavuz, General Counsel Tuba Pekin, and CFO Tuba Yilmaz. With regards to Is Yatirim, we worked closely with Director of Corporate Finance Mete Gorbon. 

    CEELM: How would you describe the working relationship with White & Case on the deal?

    M.K.: It was not the first time we advised on an IPO with White & Case on the other side; in fact, we have found ourselves in this situation frequently over the last few years, representing both issuers and underwriters. Our teams get along very well. We had several drafting sessions in person but the majority of our communication was by telephone or email.  

    D.A.: This deal was a typical IPO deal, therefore it was not confrontational but collaborative. Similar to other IPO transactions, where there is a blurry line between the two sides, the project was run in a very collaborative mode. The project timeline and negotiations were in line with the market practice.  

    CEELM: How would you describe the significance of the IPO to Turkey?

    M.K.: This deal highlights Turkey’s strong economic programs and the rising interest in Turkish capital markets. It promises to shake up a moribund market for Turkish IPOs, characterized by years of cancelled or postponed sales. This IPO is significant for several reasons. First, it is 2017’s first successful public offering and the largest Turkish IPO in dollar terms since 2013. Second, it is a private equity investor’s first exit through an IPO in Turkey, showing international private equity firms interested in Turkish assets that this exit strategy, which is frequently used in Europe, is also available to them in Turkey. The public float of 55% is among the largest in the Turkish market and sets an excellent example for best corporate governance practices in the Turkish capital markets.

    D.A.: This deal was priced at a premium, and is the largest IPO at Borsa Istanbul for 2017, which was actually a dull year for closed IPOs at Borsa Istanbul. I personally believe this deal is a landmark deal which signifies international ECM investors’ interest in high quality Turkish assets.

    This Article was originally published in Issue 4.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Inside Out: Lactalis’ Acquisition of Covalact Dairy Producer from SigmaBleyzer

    The Deal:  In July 2017, CEE Legal Matters reported that Romania’s Leroy si Asociatii law firm had advised France’s Lactalis group on its acquisition of Romania’s Covalact S.A. dairy producer from the SigmaBleyzer private equity firm, with Schoenherr advising SigmaBleyzer on the deal.

    The Players:

    •  For Lactalis: Bruno Leroy, Partner, Leroy si Asociatii

    •  For SigmaBleyzer: Madalina Neagu, Partner, Schoenherr Bucharest

    CEELM: How did you and your firms become involved with Lactalis in this matter, Bruno? Why and when were you selected as external counsel initially?

    LsA: Lactalis has been our client for over ten years – a period throughout which we have assisted them on their largest transactions on the Romanian market. 

    I believe that one of the main reasons we were selected is our understanding and knowledge of the Romanian market. In addition, we are dedicated to delivering the best legal advice, and we are very attentive to details and are proactive and innovative thinkers, priding ourselves on our abilities to assist our clients in successful transactions.

    Our first contact with Lactalis was over ten years ago, when they started looking to expand their business in Romania. 

    We initially assisted the French Group on their first acquisition on the Romanian market: the acquisition of the dairy division of LaDorna Group, a prominent brand in the dairy market in Romania. This was back in 2007.

    Their next move took place in 2016 and involved the acquisition of Albalact – the largest Romanian dairy producer. We advised Lactalis on all transactional, regulatory, and antitrust aspects of this deal. This transaction was the first significant voluntary takeover bid carried out on the Bucharest Stock Exchange followed by the squeeze-out of the minority shareholders.

    And last but not least, in July 2017, we advised the French group on the acquisition of Covalact – a deal which confirmed Lactalis’ commitment to make Romania the hub of their regional development. We assisted them in all transactional and regulatory aspects of the deal. This involved drafting and negotiating the transaction documents, notifying the transaction and submitting commitments to the Romanian Competition Council in order to obtain antitrust clearance.

    CEELM: What about you, Madalina? Did your participation in Lactalis’s 2016 acquisition of Albalact play a role?

    Schoenherr: SigmaBleyzer is a long-time client of Schoenherr, so we knew them and had worked for them on other projects before. It was in the very early stages of their intention to sell that they instructed us to assist on their exit from Covalact. Our previous experience in the Albalact deal might have played a role in the client’s eyes in the sense that it showed we were already familiar with the Romanian dairy market. But when SigmaBleyzer first instructed us on the Covalact deal, the project was in such an incipient phase that no one could predict Lactalis would be the buyer. So if the fact that we had already met the buyer in a previous similar transaction was a plus, this came in handy only at a later phase of the project, and not when the client instructed us.

    CEELM: Were the two deals – Lactalis’s acquisition first of Albalact and then of Covalect – related in any way?

    LsA: Unfortunately, we do not have details regarding Lactalis’s strategy at a CEE level.

    Schoenherr: For the buyer I assume the two deals are part of a plan to consolidate their position on the Romanian market. But for our clients and our firm, there is no connection between the two projects. We assisted two different clients in two distinct transactions: in the Albalact deal, we assisted Reconstruction Capital II and Raul Ciurtin, and in the Covalact deal, we assisted SigmaBleyzer.

    CEELM: What, exactly, was the initial mandate when you were both retained for this particular matter? 

    LsA: The initial mandate when we were retained for this project was the acquisition of 100% of the shares issued by Covalact, consequently this was the deal structure that was consistently followed by Lactalis.

    This project started in the third quarter of 2016 when we were given access to the virtual data room organized by the seller for performing a due diligence project with respect to the target companies, covering the most important legal areas.

    Schoenherr: As mentioned above, we were contracted by SigmaBleyzer at an early stage of its intent to sell. We were retained to deliver a vendor due diligence and to assist in all phases of the deal (i.e., structuring, documentation, negotiations, post-signing assistance, and closing). Covalact was an appealing target for dairy market players, and in the competitive process that was the first phase of this project Lactalis was one of a series of prospective buyers.

    CEELM: Were you involved in the selection of Lactalis as the eventual buyer?

    Schoenherr: We were already involved in the project when Lactalis submitted their offer to the seller.

    CEELM: Who were the members of your team, Bruno, and what were their individual responsibilities?

    LsA: Our team consisted of three of the four Leroy si Asociatii partners: myself, Andreea Toma, and Eleonora Udroiu.

    When discussing responsibilities, the negotiations and the Share Purchase Agreement were handled by myself and Andreea Toma, while the proceedings related to the notification of the transaction to the Competition Council were handled by Eleonora Udroiu and myself.  

    CEELM: What about your team, Madalina?

    Schoenherr: For our part, the project was coordinated by Markus Piuk, a partner in Schoenherr’s Corporate/M&A practice, and myself. The core team also included Alexandra Munteanu, a senior attorney at law in Schoenherr Bucharest’s Corporate/M&A practice group. On the aspects related to other practice areas, our Bucharest colleagues Georgiana Badescu (a partner in the EU & Competition practice), Silvia Opris (a partner in the Real Estate practice) and Adriana Radu (a partner in the Labor & Employment practice) were also involved.

    CEELM: Please describe the final agreement in as much detail as possible: how was it structured, why was it structured that way, and what was your role in helping it get there?

    LsA: B.S.A. International purchased the stake held by SE Dairy B.V. in the share capital of Covalact. Through this acquisition B.S.A. International gained direct control over Covalact and indirectly over its subsidiaries Lactate Harghita S.A. and Covalact-Prodserv S.R.L.

    The share purchase agreement included the terms and conditions usually used for this type of transaction. It was signed on December 16, 2016, and the closing took place on June 30, 2017.

    Schoenherr: The transaction was structured as a share deal, which is actually the most common deal structure. It is preferred by investors as it is easier to implement than asset deals and ensures that the business post-transaction is operational from Day 1. I would not want to minimize our role in the transaction, but it’s only fair to say that our participation was standard M&A lawyer work and the process did not face any unsurmountable bumps along the way.

    CEELM: What was the most challenging or frustrating part of the process? 

    LsA: The most challenging part of this process was the duration of the proceedings for obtaining clearance from the Competition Council. This was a quite long and complex process, from preparing the notification of the economic concentration operation to the submission of commitments to the Romanian Competition Council. 

    The Romanian Competition Council cleared the economic concentration by accepting the commitment of our client to grant a time-limited license for one of its brands for butter to an independent third party, with the purpose of allowing the licensee to carry out a re-branding process within a certain period of time.

    Schoenherr: The only challenge was timing, as the entire deal was signed within a matter of months. There was some time pressure and the deadlines in each phase were quite tight, but what helped a lot was the fact that both parties shared a common goal of getting the deal done in a swift manner.

    CEELM: Was there any part of the process that was unusually or unexpectedly smooth/easy?

    LsA: Of course as with any major transactions there were good and difficult parts. As regards the Lactalis-Covalact transaction, the finalization of the closing documents and the implementation of the post-closing actions were the parts of this process that went on very smoothly.

    Schoenherr: The process did go smoothly, but I would not say this was unexpected, as both parties had prior transactional experience on the Romanian market and a clear picture of their objectives. As a result, the negotiations were professional and business-oriented.

    CEELM: Did the final result match your initial mandate, or did it change/transform somehow from what was initially anticipated?

    LsA:  The final result was in line with the initial mandate as from the beginning the goal was the acquisition of 100% of shares issued by Covalact and of course the authorization from the Competition Council.

    Schoenherr: Our initial mandate remained unaltered throughout the project. We defined our scope of work in the beginning together with the client and there was no need to change it, as there were no unforeseen events to change the course of the transaction.

    CEELM: What individuals at Lactalis did you work with, Bruno and how did you interact with them?  

    LsA: As I was mentioning earlier we have a very good relationship with Lactalis, having them as a client for over ten years. On the Albalact and Covalact transactions, we worked with Mr. Erick Boutry, Head of the Mergers and Acquisition Department of Lactalis Group and with Gaelle Breton, Legal Counsel at Lactalis Group. It is honestly very easy working with them, and the interactions between our teams were very smooth.

    CEELM: What about your contacts at SigmaBleyzer, Madalina?

    Schoenherr: We worked closely with Mr. Lev Bleyzer, who is a Founding Partner and the Chief Operating Officer of the company, and with Mr. Radu Bugica, the company’s Country Manager in Romania, who played a key role in Covalact’s management as representative of SigmaBleyzer in the company’s Board of Administration.

    CEELM: How would you describe the working relationship with Schoenherr on the deal, Bruno? 

    LsA: We have sat across the table from Schoenherr many times in the recent period, thus I can say that our interaction with them is a good one.

    Our teams worked closely on various occasions, either through personal meetings, emails or phone calls. 

    Our working relationship with Schoenherr is a smooth one, we know each other well, as they were the firm advising on the seller side for the Albalact deal as well.  

    CEELM: And how would you describe the relationship, Madalina?

    Schoenherr: I believe the fact that we had met before in the Albalact deal, with Leroy si Asociatii representing Lactalis, did play a role in how the Covalact deal was handled from a legal perspective. This allowed for a positive level of predictability in approaching the juridical aspects, which in the end helped in meeting the tight deadlines. The team at Leroy si Asociatii involved in these two deals shows a good understanding of their client’s commercial objectives and this helps them approach the legal aspects in a pragmatic manner.

    CEELM: Finally, how would you each describe the significance of the deal to Romania?

    LsA: This deal is quite significant to Romania as the presence of the French group – the worldwide leader in dairy products – is of great importance to the local market. Furthermore, this proves the commitment and trust shown by Lactalis to the country and to its future development.

    Schoenherr: The two deals – Albalact and Covalact – have recently won us an award from a leading Romanian business journal for advising on the largest transaction of 2016 in the FMCG sector in Romania. Also, the fact that the two deals involved the two largest Romanian dairy producers is an indication of their importance in the local dairy industry, as they generated the current dairy market leader. Furthermore, the fact that SigmaBleyzer obtained a good return on their investment and, through proper management, turned Covalact into an appealing target for investors gives a positive signal for private equity funds interested in investing in and managing local entities.

    This Article was originally published in Issue 4.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.