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Inside Out: E.ON Acquisition of Stake in VSE Holding

Inside Out: E.ON Acquisition of Stake in VSE Holding

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On September 22, 2020, CEE Legal Matters reported that Kinstellar’s Bratislava office had advised E.ON on its acquisition of a 49% stake in electric utility Vychodoslovenska Energetika Holding from the German electric utilities provider RWE. We reached out to Kinstellar Partner Viliam Mysicka for more information about the deal.

CEELM: Viliam, how did you and Kinstellar become involved in this matter? Why and when (and by whom) were you selected by E.On as external counsel initially?

Viliam: Kinstellar was retained by E.ON based on its work in a long-term cooperation project. We were mandated by Mr Sebastian Heidtkamp, Head of Legal M&A at E.ON, and were appointed alongside Linklaters, who advised on the German and international aspects of the deal (as the deal was part of a larger asset swap between E.ON and RWE).

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

Viliam: The initial steps included deal structuring questions and analysis of applicable agreements (such as the shareholder agreement with the Slovak state).

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

Viliam: I and Adam Hodon, my Bratislava-based Partner, were the main contacts. We led all communication, as the transaction was complex and important for client. The team was further supported, on a case-by-case basis, by several specialists.

CEELM: Please describe the deal in as much detail as possible, including your (and Kinstellar’s) role in helping make it happen.

Viliam: The deal consisted of the purchase by E.ON of 49 percent of shares with managerial control in VSEH from RWE. Our role was complex, as we supported the client during the negotiation of terms with the seller – RWE – as well as the second shareholder, the Slovak State.

CEELM: What’s is the current status of the deal?

Viliam: It closed in summer 2020.

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

Viliam: The whole context of the deal was challenging, as it took place during the pandemic, which limited opportunities for people to meet for negotiations, etc. Also, a new government was introduced in Slovakia in March 2020, and their priority was to fight Covid rather than to deal with the economic situation, which resulted in a long period of deal-related discussions. 

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

Viliam: No, there was no substantial change.

CEELM: What specific individuals at E.On instructed you, and how did you interact with them?

Viliam: In addition to Mr Heidtkamp, also Mr Torsten


CEELM: How would you describe the working relationship with Freshfields on the deal?

Viliam: We believe that the discussions with Freshfields were constructive. Given the Covid element, all discussions and negotiations took place over the phone. Negotiations were often challenging given the complexity of the deal and very sophisticated parties on both sides of the table.

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

Viliam: Apart from this deal being perhaps the largest on the Slovak market in 2020 by size and value, it is no less important from other angles as well. It re-confirmed confidence in deal making in these challenging Covid times. It also confirmed that Slovakia remains on the radar screen of major west European investors. Finally, it is a great value for the Slovak state to have a new partner in a strategic energy company in Slovakia.

This Article was originally published in Issue 8.2 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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