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Clifford Chance has acted as lead counsel and the Yegin Ciftci Attorney Partnership — the firm associated with Clifford Chance in Turkey — has acted as local legal counsel for the QNB Group on its “definitive agreement” to acquire the National Bank of Greece’s entire 99.81% stake in Turkey’s Finansbank A.S., for a total consideration of EUR 2.7 billion (USD 2.94 billion). Freshfields advised the National Bank of Greece.

According to a QNB press release, “through controlled growth, the bank aspires to become an Icon in the Middle East and Africa by 2017. To achieve this, QNB Group is pursuing inorganic growth in large, high growth markets. Turkey, with its significant market size, population, growth track record, strong economic and banking sector prospects and strategic location as a gateway between Europe and Asia represents such a market and is therefore of strategic importance for QNB Group. Turkey’s ties with the rest of the region have increased in recent years, as trade with the Middle East and North Africa region has risen nearly ten-fold from USD 5.6 billion in 2000 to USD 52.2 billion in 2014.”

Finansbank is the fifth largest privately owned universal bank by total assets, customer deposits, and loans in the Turkish market. The bank was incorporated in 1987 and acquired by the National Bank of Greece, which currently has a shareholding of 99.81%. Finansbank has a nationwide distribution network of 647 branches and over 5.3 million customers. As of June 30, 2015, Finansbank has USD 29 billion in assets, USD 19.5 billion in loans, and USD 14.6 billion in deposits, and total equity amounting to USD 3.6 billion as per International Financial Reporting Standards. According to QNB, “Finansbank has a strong capital base with a capital adequacy ratio of 15.9%, which is among the highest in the Turkish banking sector, together with solid long-term foreign currency ratings of Ba2 and BBB- by Moody’s and Fitch, which are a testament to Finansbank’s successful business, operating model and risk management.”

QNB intends to fund the purchase through its own funds.

Commenting on the announcement, QNB Group’s Chief Executive Officer Ali Ahmed Al-Kuwari said: “This transaction is a significant milestone in QNB’s Vision to becoming a MEA Icon by 2017 and a leading global bank by 2030. Finansbank is a highly regarded financial institution with an impressive track record of success in Turkey, and we look forward to welcoming the personnel and management of Finansbank to QNB Group. We also look forward to contributing towards Turkey’s future economic development and further enhancing its overall connectivity with international markets as an integral part of QNB Group’s global network.”

QNB Capital and J.P. Morgan are acting as joint financial advisors on the transaction, which has been approved by the board of directors of both banks and the General Council of the Hellenic Financial Stability Fund.

The closing of the transaction is subject to regulatory approvals and other customary closing conditions. The transaction is expected to close in the first half of 2016.

The Clifford Chance team advising on the transaction included Partner Mo Al-Shukairy and Senior Associates Daniel Boyle and Andrew Steele. The Yegin Ciftci Attorney Partnership team was led by Partner Itir Ciftci, supported by Counsel Kemal Aksel, Associates Deniz Gocuk, Cansu Aras, and Aras Gorkem.

Freshfields did not reply to an inquiry about its work on the deal.

Editorial Note: After this article was published, Freshfields contacted CEE Legal Matters to announce that Partner Sebastian Lawson led the team advising the National Bank of Greece on the deal.

Asters has advised the China Development Bank (CDB) in connection with a number of agreements related to a long-term strategic partnership with Ukraine’s Ukrtelecom and Huawei Technologies (one of the largest Chinese networking and telecommunications equipment and services companies).

Under the agreements, Ukrtelecom will receive financial support from CDB and technological support from Huawei to modernize its telecommunications network in Ukraine. In the first stage of the partnership Ukrtelecom expects to receive credit from CDB amounting to USD 50 million, with repayment of loans to be completed by the end of 2022.

The China Development Bank is a state-owned financial institution with a focus on the development of international business. Ukrtelecom JSC is the largest fixed line operator in Ukraine, and is the leading Internet provider. 

Ukrtelecom is the sole founder and member of TriMob LLC, a 3G/UMTS mobile operator. The company provides fixed telephony service to almost 7.2 million subscribers, and broadband Internet to over 1.6 million customers.

Huawei is a global leader of ICT solutions. The company’s telecom network equipment, IT products and solutions, and smart devices are used in 170 countries. In 2014, the company’s revenue reached approximately USD 46.5 billion.

“CDB’s financing will support one of the leading telecommunications operators in Ukraine, assisting a viable economic activity and securing jobs in our country,” said Asters Partner Iryna Pokanay. “We are happy to be a part of the project aimed at the further strengthening of the economic development of Ukraine.” 

“With this agreement Ukrtelecom has opened the gates for huge investments into the fixed telecom infrastructure of Ukraine,” said Yuriy Kurmaz, CEO of Ukrtelecom. “Using these resources efficiently, Ukrtelecom will become one of the most modern telecom companies providing its customers with classic and innovative services”.

Asters’ banking and finance team advising on the project consisted of Partner Iryna Pokanay, Counsel Gabriel Aslanian, and Associate Inna Bondarenko.

Asters did not reply to inquiries about external counsel for Ukrtelecom or Huawei.

On 15 December 2015, the Hungarian Parliament introduced a new act amending the VAT rates currently applied on newly constructed residential real estate. With the start of 2016, the standard VAT rate of 27% will be reduced to 5% for the sale of newly constructed residences. Market experts anticipate a boom on the residential real estate market as a direct consequence.

Since the number of newly constructed apartments and houses dropped drastically during the financial crisis, the aim of the VAT regime’s amendment is to fuel economic growth and to increase the number of residential real properties available on the Hungarian market. In 2009, in the middle of the crisis, only around 9,000 residences were developed in Hungary – a number not even remotely close to the 43,000 new residential buildings constructed in 2004. A sharp rise in new residential construction is expected due to the amendment, with experts anticipating the development of additional 3,000 – 5,000 apartments annually.

The act introduces the VAT rate decrease to multi-unit residential apartments, provided that their size does not exceed 150 sqm. Furthermore, the special VAT scheme is also applicable for the sale of single-unit residential properties (ie. residential houses) not exceeding 300 sqm.

In addition to the changes outlined above, it must be emphasised that the reduced VAT rate will only apply for sales closed after the entry into force of the amendment and shall remain effective only until the end of 2019.

By Tamás Balogh, Attorney at Law, Schoenherr

Dvorak Hager & Partners has obtained a successful result in a dispute between client Havelka and Vattenfall Europe Mining AG. Although few details were provided, the firm reported that “the dispute was about our client’s claims resulting from a long term storage contract.”

The Dvorak Hager & Partners team was led by Prague-based Managing Attorney Achim Jahnke.

Sorainen’s Riga office has advised the Schaeffler Group on its acquisition of 100% of shares in start-up NACO Technologies from its main shareholders, which include the Imprimatur Capital, ZGI, and Proks Capital venture capital funds and other shareholders and founders. Roedl & Partners advised the sellers.

The Schaeffler Group is a leading global integrated automotive and industrial supplier. Schaeffler makes high-precision components and systems in engine, transmission, and chassis applications, as well as rolling and plain bearing solutions for manifold industrial applications. As employer of some 84,000 personnel, Schaeffler is one of the world’s largest family companies and, with approximately 170 locations in 50 countries, it operates a worldwide network of manufacturing locations, research and development facilities, and sales companies.

According to Sorainen, “Naco Technologies possesses unique expertise in the development of new coating systems, while Schaeffler is the market leader in functional surface technology in several market segments. Therefore, acquiring this highly innovative service provider will help strengthen Schaeffler’s core expertise in the technology of the future.”

Sorainen performed legal due diligence of NACO Technologies and assisted its client in the share acquisition process by advising on Latvian law, drafting transaction documents, and closing the transaction.

The firm’s team was led by Latvia Managing Partner Eva Berlaus, working with Senior Associates Renate Purvinska, Ieva Andersone, and Andis Burkevics.

Image Source: schaeffler.com

Binder Groesswang and Kinstellar have advised Sberbank Europe AG on the sale of its 99.5% stake in Sberbank Slovensko, to Penta Investments. Slovakia’s Skubla & Partneri law firm represented Penta. The agreement was signed on December 17, 2015 in Bratislava. The closing is subject to the customary approvals of the Antimonopoly Office of the Slovak Republic and the European Central Bank.

Sberbank Europe AG is a subsidiary of the Sberbank Group. Penta Investments is a CEE investment group with offices in Prague, Bratislava, Warsaw, Munich, Limassol, Amsterdam, and Jersey.

The Binder Groesswang team led by Partners Markus Uitz and Thomas Schirmer included Associate Michael Delitz for Corporate/M&A, Partner Stephan Heckenthaler and Associate Matthias Deissenberger for regulatory aspects, and Counsel Hellmut Buchroithner for IP related aspects. 

The Kinstellar team in Slovakia consisted of Counsel Viliam Mysicka, Managing Associate Miroslav Kapinaj, and Associate Tomas Melisek, all working under the supervision of Partner Adam Hodon.

The Skubla & Partneri team is headed by Partner Andrej Schwarz, assisted by Erika Galgociova and Martina Vaskovicova.

Image Source: sberbank.at

Clifford Chance is advising AXA on its plans to acquire Liberty Ubezpieczenia, an insurance company belonging to Liberty Mutual Insurance Group. Hogan Lovells is advising Liberty Mutual.

The deal is worth PLN 92.3 million (approximately EUR 21.6 million) plus the net asset value on the completion date. The finalization of the transaction depends on the customary conditions to completion, including consent from the regulatory authorities. It is expected that this will take place before the end of the third quarter of 2016.

The deal would enable AXA to continue to strengthen its position in Poland — one of the most attractive markets for the insurance and asset management company in Central and Eastern Europe. AXA would in this way increase its share on the property insurance market to 4.4% from its current 3.2%. 

Clifford Chance previously advised AXA on its strategic acquisition, for a reported EUR 135 million, of BRE Ubezpieczenia TUiR — the insurance arm of mBank in Poland. According to Clifford Chance, “the purchase of Liberty Ubezpieczenia would be another step towards implementing the strategy of further diversification of sales channels and broadening the insurance offered.”

The AXA Group employs 161,000 people, who provide services for 103 million customers in 59 countries. In 2014, according to IAS, AXA noted revenues of EUR 92 billion, and its result on its core business was EUR 5.1 billion. As at December 31, 2014, AXA was managing assets worth EUR 1,300 billion.

In Poland AXA offers protective and investment life insurance, retirement insurance, personal insurance, motor insurance, travel insurance, and asset management services to almost 2.6 million customers, and property insurance for firms, including multinationals. 

Liberty Ubezpieczenia belongs to the multinational Liberty Mutual Insurance Group, which offers services to individuals and corporate clients. Its offer incorporates a range of property and motor insurance, home insurance, travel insurance, and insurance for SMEs. The firm’s distribution network has more than 8,000 agents throughout Poland. In 2014 the firm generated a gross premium of PLN 315 million, one of the highest increases on the market. Liberty Ubezpieczenia has been present in Poland for seven years.

During negotiations, AXA was represented by London-Based Clifford Chance Partner Ashley Prebble and and Warsaw-based Counsel Marcin Bartnicki. Also involved in the transaction for AXA was a Clifford Chance Warsaw team led by Partner Nick Fletcher and including Counsel Tomasz Derda, Senior Associates Marta Bieniada, Marcin Czarnecki, Aleksandra Lis-Rychinska, and Mateusz Stepien, and Junior Associates Joanna Kaminska, Konrad Rominkiewicz, Antoni Wandzilak, and Marta Zuralska. Warsaw-based Counsel Tomasz Szymura was responsible for tax aspects of the transaction. Madrid-based Counsel Jaime Sanchez was also involved in the transaction.

Madrid-based Partner Joaqunn Ruiz Echauri and Warsaw-based Partner Beata Balas-Noszczyk led the mixed Spanish-Polish Hogan Lovells team advising Liberty Mutual. They were supported by Partner Javier Gazulla, Counsels Robert Gago, Ewa Kacperek, Tomasz Grygorczuk, and Anna Tarasiuk, Senior Associates Pawel Chodzinski and Agnieszka Szczodra-Hajduk, and Associates Carmen Herreros, Karol Ruszkowski, and Felipe Vazquez.

Baker & McKenzie’s Kyiv office has promoted Olha Demianiuk to Counsel and appointed her Head of the Healthcare Industry Group in Kyiv.

Demianiuk joined the Kyiv office of Baker & McKenzie in May 2005. She has more than 10 years of experience advising Ukrainian and international clients on domestic and cross-border M&A, complex corporate matters, and capital markets transactions. In recent years Olha Demianiuk has focused on the pharmaceutical and healthcare sector, advising clients both on transactional matters and regulatory issues. 

Commenting on the promotion, Kyiv-based Partner Viacheslav Yakymchuk noted, “We’re pleased to see our Healthcare Industry Group continue to strengthen and welcome Olha in the new role. This promotion recognizes Olha’s valuable contribution and dedication to the development of the Healthcare Industry Group in Kyiv and our commitment to provide the highest quality service to our clients.”

Linklaters has acted for W. P. Carey, a real estate investment trust specializing in corporate sale-leaseback and build-to-suit financing, in relation to the acquisition of Multimedialny Dom Plusa office building. Multimedialny Dom Plusa is the headquarters of the giant Polish telecommunications operator, Polkomtel. The seller, Harmony-Warszawa-Konstruktorska sp. z o.o. — an entity affiliated with Polkomtel — was advised by Modrzejewski i Wspolnicy.

Multimedialny Dom Plusa is a modern, six-story class A office building with a total office space of 23 thousand square meters, located in Warsaw’s Mokotow district, at Konstruktorska Street. The building was designed according to the needs and specifications of the main tenant, Polkomtel. According to Linklaters, “it is characterized by modern architecture and was designed by Kurylowicz & Associates studio.”

Linklaters Warsaw was “involved in and advised on comprehensive due diligence of the asset and all transaction-related work.” Linklaters Managing Associate Janusz Dzianachowski led the team advising longstanding client W. P. Carey with the support of Senior Associate Marta Bijak-Haiduk and Associate Tomasz Trystula.

Image Source: urbanity.pl

Aequo has advised Mosquito Mobile on the acquisition of TRANS-CON LLC, a company operating the telecom infrastructure in Kyiv city’s underground. The transaction was completed at the beginning of December 2015.

According to the firm, “this transaction is first of a kind and very important stage for launching long-awaited wireless network coverage in the all Kyiv city underground area.”

The Aequo team was led by Partner Anna Babych and included Senior Associate Oksana Krasnokutskaya and Associates Yaroslav Lepko and Anton Babak.

In response to an inquiry by CEE Legal Matters, Aequo explained that it was not able to identify the sellers.