November 2012 - Csilla Andrékó, managing partner of Kinstellar’s Budapest office, and Ádám Máttyus, partner and head of Kinstellar’s M&A and Corporate practice in Budapest, are quoted in a special Central and Eastern Europe supplement to the China Business Law Journal published in October.
The special report highlights, country by country, the current situation of Chinese-CEE business relations and trends for the future.
In Hungary, in an effort to boost Chinese-Hungarian investments, the government in May signed a broad-based cooperation agreement with several Chinese entities. While some deals have materialised, some observers note that the pace of investment has been slower than initial expectations.
Csilla Andrékó cautions that the speed of regulatory reform in Hungary “may come as a surprise” to some Chinese investors, who may be unfamiliar with the country. Despite this, one trend that is emerging is that Chinese equipment makers are looking to invest in Hungary in order to move up the value chain.
A case in point is the acquisition by Well-Tech, a Chinese sheet metal processing company, which acquired Hundec, a Hungarian sheet metal processor, in February this year. Kinstellar advised Well-Tech on the €25 million transaction.
Ádám Máttyus explains that this was a distressed sale, as Well-Tech was able to complete the transaction following bankruptcy proceedings in France against the former shareholder in Hundec. The deal also involved complex legal advice.
“The formation of a joint venture enabling certain top managers to complete a partial management buy-out added an extra layer of complexity to the structure.” The management buy-out “was used to retain and incentivise well-performing management at the company,” Mattyus explains.
Well-Tech’s acquisition of Hundec is one of the top six Chinese transactions in CEE in the past two years.