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CEELM10 Interview: A Decade of M&A in Romania

CEELM10 Interview: A Decade of M&A in Romania

Issue 10.11
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Musat & Asociatii Deputy Managing Partner Razvan Stoicescu talks about the evolution of the practice and their role as legal advisors in Romania over the last 10 years.

CEELM: Over the last 10 years, what types of projects have been keeping your M&A team busy, and what trends in terms of mandates have you noticed over time?

Stoicescu: Over the last decade, our M&A team – part of one of the largest and most mature law firms in Romania – has been involved in a variety of M&A deals and projects. These covered the full spectrum of M&A projects, from privatizations to joint ventures to standard mergers and acquisitions.

The team, currently consisting of six partners and 32 senior lawyers, has remained active across some of the most sophisticated deals in the Romanian market, engaging continuously in mandates and opportunities, both domestically and with a cross-border element.

Deals like the dual listing of Electrica on the BCV and the London Stock Exchange (privatization in 2015), CRH’s acquisition of Lafarge and Holcim business in Romania (largest M&A in 2015), the acquisition of A&D Pharma by the Penta group (largest M&A in 2017/2018), the first joint venture between the Romanian state, as majority shareholder, with a private investor (Damen), where the private investor was granted operational control of a state-owned company, the Mangalia shipyard (2018/2019), the USD 3.4 billion acquisition of the Purolite group by Ecolab Inc (2021/2022), or the joint venture between Renault Group and Geely to launch Leading Powertrain Technology Company (2023) – all are highlights representing some of the most sophisticated deals in the Romanian market.

CEELM: Looking back at the last 10 years, what have been your and your team’s most intense periods, and what do you believe led to it?

Stoicescu: Our practice has been consistently engaged in big-ticket deals during these last 10 years. We have constantly benefited from a flow of large mandates due to our professional reputation and connections with international law firms who recognize our capabilities and our ability to seize market opportunities.

In terms of workload, handling VDRs of thousands of documents has become second nature for us and we have developed specialized DD teams to handle such mammoth projects efficiently. The intensity of our work is often dictated by tight deadlines, but our well-established processes help us manage these pressures effectively.

CEELM: How have the client profiles evolved over the last decade?

Stoicescu: We’ve observed a shift toward strategic investors in our client portfolio. Over the past 10 years, the majority of our deals have been with long-term investors, as opposed to funds, which are less active by comparison in the relatively small Romanian market. This trend reflects a preference for foreign strategic investors, who often aim to integrate local businesses into their larger groups.

One of our recent deals – Kohlberg acquiring a majority stake in Worldwide Clinical Trials – exemplifies this trend. According to market data, primary investors in Romania now hail from the United States, Austria, and Greece.

CEELM: And what about their needs? What new expectations do you see from clients, and what do you feel has dropped in importance?

Stoicescu: The market’s maturation has led to clients becoming more specialized and more articulate in their expectations. Today, successful lawyers must not only find solutions to get deals done but also convince clients to trust their advice, especially when this involves avoiding deal-breaking elements or legal obstacles. The legal landscape has become more complex, raising the bar for what clients expect and for what a successful deal means, with far more sophisticated requirements. As such, the ability to communicate effectively and justify legal strategies has become paramount.

CEELM: From a legislative/regulatory standpoint, what have been the main recurring challenges you have faced in making deals happen?

Stoicescu: The most significant challenge, from a calendar perspective, is obtaining FDI approvals for investments from outside the EU. This process can add considerable time to deals’ closing timelines, which is always a sensitive matter when seen against current market volatility. Since 2022, the importance of FDI approval has grown, sometimes even leading to deals being rejected on national security grounds.

CEELM: What is on the horizon? What do you believe will be the highlights in a similar interview 10 years from now?

Stoicescu: Looking ahead, the integration of AI into our profession is a key topic. We anticipate significant changes in how legal services are structured and delivered, with AI enhancing efficiency and reducing costs.

Despite this technological shift, we believe the human element remains crucial. Personal connections with clients fostered through direct interactions like face-to-face meetings or events, even informal ones, will be invaluable. In 10 years, I hope we are still known for providing trusted advisory services, augmented by AI, while maintaining the core of our business – our lawyers’ ability to deliver sophisticated solutions, in accordance with our clients’ needs, through an effective and emphatic human connection.

Musat & Asociatii is CEE Legal Matters' Practice Leader for Corporate/M&A in Romania for 2024 – learn more here.

This article was originally published in Issue 10.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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