Penkov, Markov & Partners is about to successfully complete the largest energy deal in the last 10 years

11 February 2021

In January, the final approval procedures for this deal were completed by the regulatory authorities. This extremely complex and legally difficult deal was completed between CEZ and Eurohold, with its final closure being imminent.

The attempts to sell CEZ's assets in Bulgaria go back to 2017 and have gone through various difficult and challenging peripetia. In 2019, the negotiations between CEZ and Eurohold started with the assistance of Penkov, Markov and Partners and the Czech law firm Skills.

This time, again, the procedure at the Competition Protection Commission met initial refusal, which was overcome due to additional legal arguments presented by our experienced compliance practice and in productive cooperation with the contracting parties. As a result, the CPC gave unconditional and complete permission for the convergence.

An additional obstacle and characteristic consisted in the extra procedure at the Energy and Water Regulations Commission (the “EWRC”) for some of the assets, as the deal was the first of its kind in the country. There was a lack of detailed legislation for this procedure, as well as criteria, methodology and guidance for the assessment by the regulator.

Nevertheless, this procedure was successfully completed with a Decision of the EWRC from 19.01.2021, which allowed 67% of the shares of CEZ Distribution AD to be sold to Eastern European Electric Company B.V., part of Eurohold Group.

Of particular satisfaction to us is the fact that the complex arguments and justifications submitted were fully accepted, which broadened not only the experience of Penkov, Markov and Partners, but also that of the regulatory bodies.

This deal carried huge political, economic and social charge, and is the largest energy deal in the last 10 years.

The team of Penkov, Markov and Partners in this transaction included: Vladimir Penkov - Chairman and Senior Partner, Ivan Markov - Partner, Smilena Hrusanova, Nikolay Voynov, Boris Lazarov, Asen Apostolov, Ivo Nikolchev.