Romanian M&A market – stock and asset purchases

Different forms of acquisition under Romanian Law: There are generally two types of purchases in relation to acquisitions of Romanian companies:

• Stock purchase

In this case, the buyer usually purchases all the shares of the target company. From a legal perspective, the buyer acquires all the assets, rights and liabilities of the seller, including the undisclosed or the unknown liabilities.  As payment method, the buyer company pays cash or issues new stocks in order to pay for the shares of the target company. In addition, the shareholders of the target company are compensated.

In case of a stock purchase:

• Under the Romanian commercial law, the shareholders must agree to the purchase with a majority of 50% in order to get compensated by the buyer. This whole process may take a long time.
• Under the Romanian tax law, the shareholders are liable as they receive the compensation.

• Asset purchase

In this case, the buyer only purchases the assets and liabilities that he precisely selected and that he specifically agreed to acquire from the seller. Due to this flexibility, the buyers tend to prefer the asset purchases over the stock purchases.

In case of an asset purchase:

• It is not required a decision of the majority of shareholders in favor of the asset purchase. Exception: in case the assets in question have significant value – in this case, a decision of the majority of shareholders is required.
• The buyer has the right to select the exact assets and liabilities that he is willing to purchase.
• For the buyer, the risk of acquiring undisclosed or unknown liabilities is lower, compared to the stock purchase.
• The buyer makes a purchase offer to the target company. From the buyer’s perspective, the purchase offer must take into account the potential liabilities attached to the shares and propose the price point accordingly.

Different forms of M&A structures under the Romanian Law

1. Statutory mergers – these usually take place when the buyer is a larger company than the target company and purchases its assets and liabilities. Once the merger is finished, the target company cease to exist as separate, independent entity.
2. Subsidiary mergers – in this case, the target company becomes a subsidiary of the buyer, however, it continues its own commercial activity.
3. Consolidation – in this case, both companies involved cease to exist once the merger is finished, creating a whole new economical entity.

The main M&As on the Romanian market in 2021

In 2021, the Romanian M&A market reached the highest record of 137 transactions, according to studies. The estimated total market value was approximately 4 – 4.4 billion euros, including both disclosed and undisclosed transactions. The market value of the disclosed transactions reached 2.3 billion euros.

1. Romgaz, where the Romanian State is the majority shareholder, concluded a purchase agreement with ExxonMobile, an American company, regarding 50% of the shares of the Neptun Deep project – the offshore natural gas project at the Black Sea. The price point was 920 million euros.
2. Novalpina Capital, an English company, acquired MaxBet România at an estimated price point of 250 million euros.
3. Glovo acquired the Delivery Hero’s shares on the Balkan market for 170 million euros.
4. Adventum, a Hungarian private trust fund, bought Hermes Business Campus from Atenor for 150 milion euros.
5. Hidroelectrica bought Crucea Wind Farm and Steag Energie for 130 million euros.

Simona Reithofer, partner at Oglinda & Partners