With advisory support from Gecic Law and others, Remus acquired a controlling stake in GLM from Star Capital Sgr. Remus specialises in manufacturing exhaust systems for the automotive and motorcycle industries, while GLM is an Italian manufacturer of automotive components. Gecic Law highlighted that this acquisition involved an indirect takeover of GLM RS Zrenjanin, which is part of GLM's global manufacturing capabilities.
The Gecic Law team included Partner Ognjen Colic, Senior Associates Milos Petakovic and Nemanja Sladakovic, and Associates Bojan Tutric, Marko Jovic, Nikola Ivkovic, Vasilije Boskovic, and Zarko Popovic.
Q&A with Partner and Head of Corporate and M&A, Ognjen Colic
Ognjen, can you elaborate on the primary considerations in structuring the indirect takeover of GLM RS Zrenjanin to ensure compliance with local and international policies?
Several vital considerations were crucial to ensure compliance with local and international regulations. First and foremost, thorough due diligence was conducted to assess GLM RS Zrenjanin's legal and tax standing. This included meticulously reviewing corporate records, contracts, employment agreements, and existing liabilities.
A critical aspect of the takeover was ensuring compliance with Serbian corporate regulations. Additionally, since GLM operates in multiple countries, the acquisition had to comply with the regulatory frameworks of these jurisdictions, which required close coordination with the team of law firms handling the matter from their jurisdictions' perspectives.
Another vital consideration was protecting ownership rights. The legal team ensured all rights were correctly transferred and no outstanding disputes could affect the transaction. The team also had to address any potential issues with the workforce in Zrenjanin, including the transfer of employment contracts and ensuring compliance with local labor regulations.
Integrating GLM RS Zrenjanin into Remus’s existing operations required a strategic approach to maintain operational continuity and ensure that the Serbian entity could operate efficiently post-acquisition.
What legal advice was necessary for Remus to integrate GLM into its existing operation successfully?
The multijurisdictional legal team initially guided the structuring of the acquisition to align with Remus’s strategic objectives. This included drafting and negotiating the sale and purchase agreement to reflect the terms agreed upon by the parties and to safeguard Remus's interests.
The essential advice was to carefully implement the findings from the due diligence process into the transaction documents. This ensures that all insights and identified risks are adequately reflected in the final agreement, safeguarding the integrity of the transaction, aligning all parties with the discovered realities, and, first and foremost, protecting Remus's interests.
How did the legal team navigate the due diligence process, and were there any significant findings that influenced the final terms of the acquisition?
The due diligence process was a critical element in the acquisition. It involved a thorough and systematic examination of GLM RS Zrenjanin’s legal and operational status alongside a separate tax review. The process was marked by the close coordination and integration of findings from the legal teams in this complex multijurisdictional project. Our team conducted a comprehensive legal due diligence review of the Serbian entity, covering several key aspects.
A significant part of the process involved an in-depth review of the target entity's corporate documentation, including the articles of incorporation, internal bylaws, and management meeting minutes. Through this review, we ensured that all necessary measures were taken to maintain the integrity and continuity of the company’s operations.
"Overall, the due diligence process played a critical role in identifying key areas for ensuring the seamless operation of GLM RS post-acquisition, with particular emphasis on securing the company's rights over the production facility. This comprehensive approach ultimately contributed to a smooth and successful transaction for Remus."
Another crucial segment focused on regulatory compliance. We meticulously verified the entity’s adherence to local regulations governing the industry, including licenses, permits, and other government filings. Our work to ensure that GLM RS Zrenjanin would continue to hold its rights over the production facility post-acquisition was particularly important. Our findings transposed into the transaction documents, were essential in securing these rights and ensuring the uninterrupted operation of the facility.
We also examined in detail the entity’s contracts, including those with suppliers, customers, employees, landlords, and lenders. We provided recommendations that were reflected in the transaction documents to safeguard our client’s interests moving forward. Additionally, we assessed ongoing and past litigation, disputes, and potential legal claims to ensure that any risks were effectively managed within the acquisition terms.
