CMS advises on the largest Chinese investment project in Poland

CMS has advised Chinese investor China Everbright International Limited (CEI) on the acquisition of Novago, a waste management company. Private equity fund Abris Capital Partners was the seller in the EUR 123m deal. The Office of Competition and Consumer Protection now has to issue its merger clearance for the transaction to be effective.

Established in 1992, Novago is a leading municipal waste management company. Its activities include municipal waste treatment, the production of alternative fuel (RDF – refuse-derived fuel), recycling, the production of electricity and heat in CHP facilities and landfilling. Last year, the company treated 890,000 tonnes of waste at its six sites, and its revenues amounted to PLN 135m (EUR 30m).

Purchaser CEI is a company listed on the Hong Kong Stock Exchange and one of the largest environmental protection companies in China, operating in the environmental energy, environmental water, greentech and environmental technology segments.

The acquisition of Novago is the largest Chinese investment in Poland and the largest acquisition in the environmental treatment industry in Central and Eastern Europe. Dariusz Greszta, a partner at CMS, said: “The direct investment of a Chinese listed company – China Everbright International Limited - in Poland is an example of the interest of Chinese investors in the Polish market and Polish assets. Naturally, the geographic distance and the difference between the two cultures create a number of challenges in day-to-day business, however, we are becoming better and better in understanding each other’s expectations. Our previous experience in co-operating with investors from a given cultural circle and contacts with our lawyers operating in China are very helpful to that effect. In many cases such knowledge/expertise allows us to carry out negotiations in a more effective manner or to envisage risks that may emerge at various stages of the transaction process”.

During the transaction CEI was advised by a team of CMS lawyers led by Dariusz Greszta, Partner, and Paulina Lasocka-Wysoczańska, Senior Associate, with invaluable contributions made by associates Magdalena Trzepizur and Piotr Przybylski.

CMS operates on the Chinese market through a network of lawyers located in two offices, in Shanghai and in Beijing. Andrzej Błach, a Polish Partner specialising in the energy sector has been a member of the team in Beijing since May 2015, and has been developing the CMS energy practice in China and South East Asia.