Attractive Jurisdictions
“The past year has seen a dramatic change in the fortunes of the Ukrainian legal market, which proved that only the fittest can succeed and M&A practice was no exception. The crisis and political uncertainty triggered a sea change in the financial climate, capital markets activity dropped fell off a cliff, financing ground to a halt, and the size and volume of existing M&A deals in Ukraine was greatly reduced. There was downsizing in the volume of M&A transactions in 2009, but in the second half of the year we experienced early signs of recovery of M&A market,” Sergiy Oberkovych, the head of the M&A practice of Gvozdiy & Oberkovych, commented. “We expect an increase in M&A activity in 2010, and the main reason for the increase will be the necessity for investors to strengthen their core business by acquiring additional distressed though still valuable assets as well as a desire to expand into new markets. Some companies will try to clean up their balance sheets through spinoffs, carve-outs and divestiture of noncore assets, while companies with a strong financial backup may decide that it is time to buy or bury their competitors. Ukraine may be one of the attractive jurisdictions among emerging markets, especially for pharmaceutical and the food industries. The key factor which will influence the Ukrainian M&A market remains the availability of financing and we can expect more interest in Ukraine from China, which has large currency and gold reserves. We believe that pent-up demand and distressed assets will fuel more deals in 2010,”
Headed by highly regarded expert Adam Mycyk, corporate and M&A practice group in CMS Cameron McKenna, concentrated on the cross-border purchase of Ukrainian assets. The team advised Swisscom AG on the disposal of their internet service provider business in Ukraine to Euroventures Ukraine, a Ukraine focused private equity fund. This transaction was described locally as “the first M&A deal in the telecom market this year under crisis conditions”. The firm also acted for Abris Capital Partners, a private equity investment firm, on the acquisition of a supermarket chain in western Ukraine, which consists of 25 supermarkets.
Sayenko Kharenko has one of the country’s leading corporate and M&A practices specializing in complex cross-border mergers and acquisitions, corporate restructuring, privatization, and joint ventures. The firm advises on various issues of cross-border M&A transactions, including antitrust and tax planning, due diligence and securities law. In 2009 Sayenko Kharenko represented international buyers in a number of completed and announced M&A deals, including the acquisition of 100% of the KINO TV channel in Ukraine and a share in Glavred Media by Central European Media Enterprises; the acquisition of a 75% stake in Voyage Kiev, a major tour operator in Ukraine, and Galopom po Evropam travel agency by TUI Travel Plc. The firm also advised on the landmark merger of the Ukrainian Securities Depository (AUSD) and the Interregional Securities Union (MFS), establishing the single central depository in Ukraine. Vladimir Sayenko is a recognized practitioner in corporate and antitrust law. Michael Kharenko, Sergiy Ignatovsky and Taras Prygoda developed solid expertise over the past year.
The team of Baker & McKenzie, which is greatly respected by peers participated in numerous load transactions, like: advising Poverkhnost Media Group, a leading Ukrainian broadcaster and pay-television operator, on the sale of a minority stake in its own newly-issued shares to ISTIL Group; advised CJSC YUZHNO-OKTYABRSKI GLYNY YUG, a leader in the extraction and marketing of quality cutty clays for ceramics, with respect to the sale of 50% of its shares in CJSC with foreign investments A/T Donbas Clays, to Sibelco, global market leader in the extraction and refining of various types of sand and minerals. Viacheslav Yakymchuk, partner, is very active in this area.
Asters law firm has handled a number of largest M&A transactions in Ukraine in various industries. In 2009 the team advised Swedbank AB on various Ukrainian law issues in connection with the merger of its Ukrainian subsidiaries JSC Swedbank and JSC Swedbank Invest; and on post-acquisition matters regarding the EUR 1.2 million acquisition of a 51% stake in the European Agency for Debt Recovery LLC; Chemtex Italia S.r.l. on issues of Ukrainian corporate law with regard to the contemplated acquisition by client equity interest in LLC; counseling on various Ukrainian corporate issues; FSN Capital, private equity company, on various issues of Ukrainian law in connection with acquisition of Tactel AB, a world-leading independent operator in the development of mobile applications and services, including its Ukrainian subsidiary. Asters managing partner Oleksiy Didkovskiy, senior partner Armen Khachaturyan, partners Oleksandr Padalka, Vadym Samoilenko and Svitlana Poroschuk are all recognized by peers as leading practitioners in this field of law.
M&A is one of the particularly strong practices of the Kiev team of DLA Piper, which is very often involved in cross-border M&A transactions. M&A here exists in the context of corporate practice, and advice of the team includes transaction structuring, driving clients through the process of negotiations, advice on regulatory issues, etc. In 2009 the team provided support to the United Coal Company (USA) in its acquisition by Metinvest (Ukraine); provided legal advice to Wrigley on important corporate issues related to execution of the Mars — Wrigley merger, advised Sibur, the leader of Russian petro chemistry, in a tender process for privatization of Odessa Port Plant (OPZ), which was put on hold by the state in the summer of 2009, etc. The team also advised global information security giant Symantec on the Ukrainian aspects of its acquisition of PC Tools, a global internet company. Margarita Karpenko and Arthur Kotenko, partners, are very experienced and known in the market, as is Illya Muchnyk, senior associate, who received an award from Mergermarket as one of the Top 40 Under 40 M&A dealmakers, in October 2009.
Konnov & Sozanovsky has a strong reputation in M&A transactions, demonstrating particular involvement in the telecommunication sector, retail, energy. The team recently carried out due diligence of Yalta Film; advised its client, a major Eastern European investment fund, active in retailing on the acquisition of a majority stake in a Ukrainian company which will be carrying out the sales of sportswear in Ukraine. Borys Lobovyk, Helen Yaremchuk and Alexey Pustovit made up the core of the firm’s practice.
In 2009 the M&A practice of Vasil Kisil & Partners has excelled, as it handled a number of notable M&A transactions. They include a transaction regarding the establishment of a joint project between Central European Media Enterprises Ltd Group (USA) (represented by Vasil Kisil & Partners as Ukrainian law legal counsel) and Igor Kolomoysky resulting in establishing joint control over part of the media assets of two groups (media-companies of Studio 1+1 Group and media-companies of TET Group). The firm’s practitioners also successfully completed the first-ever classic merger of SEB Bank and Factorial — two Ukrainian subsidiaries of Skandinaviska Enskilda Banken (Sweden) and represented a group of foreign investors in acquisition of a shareholding in the Oranta Insurance Company and IMG International Holding Company — a licensed securities broker. Denis Lysenko, Anna Babych, Yulia Kyrpa and Alina Plyushch, are the central figures thanks to their continuous involvement in complex M&A projects.
Magisters are continuously praised on the Ukrainian market and known for providing full transactional support of M&A transactions. The recent work highlight included advising SSL International Plc on the recent acquisition of major distributor of condoms in Ukraine on various transactional aspects and competition law issues and Danish investment company Tommy Frank Holdings in its acquisition of a majority stake in oil refinery assets in Ukraine. Andrew Mac, the managing partner of the Kiev office and head of the practice, enjoys an excellent reputation among his peers.
Andriy Kravets & Partners played an important role in a number of due diligence matters, establishment of new legal entities, including creation of a holding companies in Ukraine, structuring the company’s business in Ukraine, preparing contractual documentation, including joint investment agreements, as well as shares and assets sale-purchase agreements. In 2009 the firm was involved in conducting legal diligence for Glencore International AG, Cadogan Petroleum Plc, Interpipe, and AB Ukraine LLC. The lawyers advised in respect to merger filings and obtaining merger clearances with the AMCU for Cadogan Petroleum Plc, ICD Group and AB Ukraine LLC; as well as assisted ICD Group in connection with corporate restructuring of a group of Ukrainian companies in the agricultural sector and creation of a holding company, on corporate restructuring of a group of Ukrainian companies operating in the retail sector and creation of a holding company, and acquisition of a group of companies by investors. Partners Andriy Kravets and Vladyslav Lyaskovskiy and senior associate Julia Samoylova are experienced due to their continuous involvement in M&A transactions.
M&A is one of the strongest and most promising practices of Gvozdiy & Oberkovych law firm. The firm’s team, headed by Ukrainian partners Sergiy Oberkovych and Valentyn Gvozdiy and international partner Gina Berg advises clients on various aspects of cross-border M&A deals, joint ventures and privatizations, renders legal services on related corporate matters, antimonopoly and regulatory issues. The last year’s transactional portfolio involves such notable representations as USD 9.5 million, USD 7.5 million, and EUR 2.5 million acquisitions of Ukrainian companies in the agricultural sector by foreign investors. Besides, the team assisted a large investment company in USD 2.5 million acquisition of assets in Ukraine, and Agora Ukraine, a subsidiary of Polish media corporation Agora SA in its acquisition of a well-established magazine.
The corporate and M&A team of 20 practitioners led by partners Maksym Cherkasenko and Timur Bondaryev in Arzinger, that became increasingly sector-oriented, and focuses in particular on real estate, telecommunications, automobile industry, household’s production. It recently supported the USD 15 million acquisition of the Ukrainian group of TV cable providers by an American investment fund; USD 13 million acquisition by the strategic investor of the Swiss SPV having a controlling stake in a group of Ukrainian real estate owners; acquisition of a 51% stake in the Emerald development project in Sevastopol from XXI Century Group. In 2009 Arzinger’s team was strengthened by Pavlo Khodakovsky and Oleksiy Yasinsky.
The Kiev office of Chadbourne & Parke led by managing partner Jaroslawa Johnson maintains a long-standing reputation for its corporate/M&A activity. The latest work highlights of the practice are representation of VimpelCom in USD 226 million acquisition of a 49.9% stake in the Euroset Group, Russia’s largest mobile handset retailer, and acting for Daimler AG in the USD 250 million of a 10% stake in Russian truck maker KamAZ.
Clifford Chance has since 2008 expanded its presence in the market by opening an office in Kiev, and the Ukrainian branch developed M&A work and carried out a substantial list of M&A and corporate projects. Over the past year the team with the key involvement of Nick Fletcher, partner, and Dmytro Fedoruk, senior associate, advised Meyer Bergman in connection with the acquisition of the Aladdin Shopping Centre in Kiev (one of the first acquisitions of a shopping centre by a western private equity fund in Ukraine) and a Ukrainian food-processing company in its sale.
Being frequently involved in cross-border M&A transactions, Gide Loyrette Nouel in Kiev continues to conduct either transactional work or provide advice on various related regulatory issues depending on specific industry focus. Recent deals of note included acquisition of an Ukrainian insurance company by a foreign purchaser; advising Renault Trucks Ukraine on the potential acquisition of one of its main trucks dealers in Ukraine; assistance to a private investor and a leading hotel group on the purchase of shares in a Cypriot holding company that would develop a hotel and spa in Southern Crimea. Karl Hepp de Sevelinges, Bertrand Barrier and Inna Kostrytska played an important role in the development of its practice area in 2009.
Throughout 2009 ENGARDE’s counsels have enhanced M&A expertise significantly and were increasingly involved in the largest M&A transactions in Ukraine. Major projects supported by the firm include the USD 500 million acquisition of Amstor retail chain by Smart Holding B.V.; establishment of the USD 500 million joint venture with the State of Ukraine on the basis of Kryviy Rig Iron Ore Works by Smart Holding B.V. and Metalloinvest Holding Co.; establishment of the USD 268 million vertically integrated shipbuilding holding company Smart Maritime B.V. headquartered in Europe; corporate restructuring and establishment of the USD 90 million holding company Veres Group B.V. headquartered in Europe; corporate restructuring of Promet Still, its affiliated companies Neva Istil and Neva Invest, owned by Metinvest B.V., and EUR 10 million sale of companies to Dorado Commercial Limited. Partners Andriy Vyshnevsky and Irina Nazarova and counsels Roman Ognevyuk and Olga Fayzieva were recommended for their continuous involvement in M&A projects.
In 2009 the Kiev team of Salans was active on the M&A arena and acted as legal advisor in Ukraine, covering comprehensive advice to CHS Inc. regarding its acquisition of an ownership interest in a grain terminal in the port of Odessa; represented Delta Maxi with regard to acquisition of a Ukrainian retail company and Diebold with regard to its acquisition of a legal entity in Ukraine.
Serving clients on mergers and acquisition in insurance, banking, energy and manufacturing, corporate and M&A transactions of Schoenherr Ukraine led by Ilona Zekely, are predominantly of a cross-border nature. The team recently advised one of its clients, UNIQA group, in connection with the sale of shares in CJSC Classic Insurance Company.
Having gained a notable profile in M&A work, in the past year Spenser & Kauffmann conducted legal support of acquisition of 100% equity in two TV companies (and corporate restructuring of TV companies on pre-acquisition stage and advised on the acquisition of the exploration field of subsoil via acquisition of corporate rights in a foreign holding company, owning 100% equity (through one intermediary entity) in a Ukrainian company, having a permit on use of subsoil. Valentyn Zagariya and Andrey Reun are active at all stages of transactions.
Being quite active in either domestic M&A transactions or cross-border acquisitions of Ukrainian assets, Volkov Koziakov & Partners advised clients Favorite Plus Ltd and Krosstar Ltd on the acquisition of a stake in statutory funds of agricultural companies; represented Grasonmer Enterprises Limited during the acquisition of SP Dialog-Kiyiv. Oleksiy Volkov, managing partner, continues to earn significant respect from peers.
Jurimex law firm had a busy year and focused mainly on the recreation sphere. The practice led by Marina Slobodnichenko, supported a deal on acquisition of an equity stake in CJSC Pribrezhny pension, sale of corporate rights of M.I.B.S. Travel LLC, sale of SE Dnieper recreation centre.
The Kiev office of Peterka & Partners was active in multijurisdictional acquisitions (Greencarrier International AB, a member of the Swedish holding Bjork.Eklund Group AB, on the acquisition of the largest Latvian logistics and air transportation company, with a subsidiary in Ukraine) and traditional purchase of Ukrainian assets in the real estate sector from abroad: advisory services to Czech company Crestyl management a.s. and French real estate developer Catinvest S.A., on the acquisition of several Ukrainian companies.
The tax and legal department of Ernst & Young is visible in the market for M&A work, performed by M&A law leader Albert Sych and Pavlo Moroz. The past year was noted for legal due diligence for a Kuwaiti company that acquired an oil and gas company in Ukraine as well as due diligence, transaction advice, follow-up transaction support to an international financial company.
M&A work is a substantial part of corporate practice in the tax and legal department of Deloitte in Kiev. For example, its lawyers recently performed vendor legal due diligence procedures for major Ukrainian car distributing and servicing company Eurocar and buy-side legal due diligence procedures for Greek investors looking into a Kiev-based real estate holding company with the aim of acquiring a major shareholding.
Being active in advising on acquisition and divestiture of equity interest in Ukrainian companies LLCs and joint-stock companies, Voropayev & Partners provided legal support in purchases of significant interests in energy companies and businesses. Recent experience includes advice to SCM regarding completion of a merger of its Metals & Mining assets with SMART group.
M&A work is one of the key practice areas of Noerr Stiefenhofer Lutz office in Kiev, as headed by Dr. Mansur Pour Rafsendjani. Some representative projects in this sector include advising: a German automotive supplier in the acquisition of a corporate group with businesses in Ukraine, Hungary, and Romania; a German Dax 30 technology company on a merger with a Ukrainian company; a German waste disposal group on the acquisition of a business in Ukraine (legal and tax matters). The major highlight of 2009 is representation of French building equipment producer Altrad Group in a global acquisition.