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Case Study: Project Anis – Establishment of a German-Turkish Joint Venture Dr Henrik Drinkuth 20 November 2014.

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Presentation on theme: "Case Study: Project Anis – Establishment of a German-Turkish Joint Venture Dr Henrik Drinkuth 20 November 2014."— Presentation transcript:

1 Case Study: Project Anis – Establishment of a German-Turkish Joint Venture Dr Henrik Drinkuth 20 November 2014

2 Parties:Turkish shareholders of HSS Otomotiv and Blacktech, two Turkish companies producing air springs for commercial vehicles under the brand “Aircruise” and aftermarket products TrelleborgVibracoustic, a joint venture of the Swedish listed industry conglomerate Trelleborg with 15,000 employees and annual sales of EUR 1.5bn and the German privately owned industry conglomerate Freudenberg with 16,000 employees and annual sales in excess of EUR 6bn TrelleborgVibracoustic is the sole shareholder of the German commercial airspring business Vibracoustic Idea:Shareholders of HSS Otomotiv/Blacktech and TrelleborgVibracoustic wanted to combine their commercial vehicle airspring business (CVAS) and to operate worldwide Rationale:HSS Otomotic/Blacktech is particularly strong in the production and distribution of well-priced airsprings and CVAS aftermarket products and has a strong standing and distribution power in the growing Turkish market Vibracoustic is powerful in the high end CVAS business with the strong brand Vibracoustic Alternatives:Acquisition of 75% or 100% of the shares in HSS Otomotiv by TrelleborgVibracoustic? 2 The Case

3 3 100% Individual Shareholders HSS Otomotiv Blacktech 100% 50% TrelleborgFreudenberg TrelleborgVibracoustic Vibracoustic Germany Vibracoustic Hungary 100%

4 Setting up of a new company (“JV Company”) by HSS-Shareholders on the one side and TrelleborgVibracoustic on the other Transferring all shares in HSS Otomotiv to the JV Company on the one hand, and assets of Vibracoustic relating to the CVAS business including the shares in Vibracoustic Hungary to the JV Company on the other Technically, the Vibracoustic assets and the shares in Vibracoustic Hungary (“VC Assets”) were sold by Vibracoustic Germany to the JV Company against a cash purchase price. The funds to pay the purchase price were provided by TrelleborgVibracoustic by means of a capital contribution Relocation of the production site of Vibracoustic Hungary to Blacktech premises in Turkey where R&D remains in Hungary 4 Implementation

5 5 100% Individual Shareholders HSS Otomotiv Vibracoustic Assets Blacktech 50% Trelleborg JV Company 49,9% Freudenberg Relocation of Production Site 50,1% 100% TrelleborgVibracoustic Capital Contribution VC Assets Sale Purchase Price Vibracoustic Germany R&D Vibracoustic Hungary

6 Leadership:Parties agreed TrelleborgVibracoustic to have the lead and to hold the majority of the votes – 50% plus one vote Consolidation Requirements – no more, no less than required for consolidation Keep partnership alive Valuation:Each side carried out a legal and financial due diligence. Valuation of each of the businesses was then determined by an independent auditor Compensation:Imbalance was settled by compensation payment – resulting in a payment made to HSS Shareholders Governance:●Corporate Bodies – Management Board and Advisory Board ●Management Board – Two members; each Party entitled to appoint one member; rotation of chairman position ●Advisory Board – Six members; each Party entitled to appoint three members Minority Protection:Which decisions can be made by simple majority (i.e. by TrelleborgVibracoustic) and which decisions require also the votes of HSS Shareholders? Dead Lock:What happens if a resolution fails to achieve the required majority? 6 Negotiation Points

7 Applicable Law:German, Turkish or neutral law? Share Transfers:Shareholders’ approval required; pre-emption rights; tag-along rights 7 Negotiation Points

8 Process: Well-organised Clear structure was set up at the beginning Negotiation: Fair and constructive Each side tried to understand the cultural background of the respective other side Implementation: Fast and efficient Relocation of the Hungarian manufacturing site was, though challenging, successfully implemented Real Life: Vibracoustic CV Airsprings is a successfully growing company with locations in, amongst others, Germany, Turkey, China and the US Vibracoustic CV Airsprings recently celebrated its first anniversary Manufacturing and sales network is fully established Clear focus on commercial airsprings enabling the JV Company to quickly react to changes in the market where most of the competitors are faced with a much slower decision making process Vibracoustic CV Airsprings has its organisational structure in place Combination of Blacktech/Vibracoustic resulted in a stronger product mix with manufacturing sites on three continents 8 Summary

9 Dr Henrik Drinkuth Rechtsanwalt | Partner T F E CMS Hasche Sigle Partnerschaft von Rechtsanwälten und Steuerberatern mbB Stadthausbrücke 1-3 | Hamburg | Germany 9 Contact Details

10 CMS Hasche Sigle is one of the leading commercial law firms. More than 600 lawyers serve their clients in eight major German commercial centres as well as in Brussels, Moscow, Beijing and Shanghai. CMS Hasche Sigle is a member of CMS Legal Services EEIG, a European Economic Interest Grouping that coordinates an organisation of independent law firms. CMS EEIG provides no client services. Such services are solely provided by CMS EEIG's member firms in their respective jurisdictions. CMS EEIG and each of its member firms are separate and legally distinct entities, and no such entity has any authority to bind any other. CMS EEIG and each member firm are liable only of their own act or omissions and not those of each other. The brand name "CMS" and the term "firm" are used to refer to some or all of the member firms or their offices. CMS locations: Aberdeen, Algiers, Amsterdam, Antwerp, Barcelona, Beijing, Belgrade, Berlin, Bratislava, Bristol, Brussels, Bucharest, Budapest, Casablanca, Cologne, Dubai, Duesseldorf, Edinburgh, Frankfurt, Geneva, Glasgow, Hamburg, Istanbul, Kyiv, Leipzig, Lisbon, Ljubljana, London, Luxembourg, Lyon, Madrid, Mexico City, Milan, Moscow, Munich, Muscat, Paris, Podgorica, Prague, Rio de Janeiro, Rome, Sarajevo, Seville, Shanghai, Sofia, Strasbourg, Stuttgart, Tirana, Utrecht, Vienna, Warsaw, Zagreb and Zurich. CMS Hasche Sigle Partnerschaft von Rechtsanwälten und Steuerberatern mbB, registered office: Berlin (Charlottenburg District Court, PR 316 B), list of partners: see website.


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