Gecić | Law advised Železara Smederevo and the Government of Serbia on EU, regulatory and corporate matters in connection with the €46 million ($52 million) sale of assets of Železara Smederevo’s through a public tender procedure to the Chinese company Hebei Iron and Steel Company Limited (HBIS). Under the transaction, HBIS pledged to invest at least $300 million in a new company and to utilize the acquired assets to develop its global layout and to provide better service for its customers in Europe.
Železara Smederevo is Serbia’s leading producer of steel and is the second-largest Serbian exporter and is currently responsible for nearly 1% of Serbia’s GDP. The company, which was formerly owned by US Steel, having been acquired through the privatization process, was sold back to the Government of Serbia in 2012, marking the exit of US Steel from the country. Lead legal counsel on the asset sale Bogdan Gecić stated that “the investment and revitalization of the steel mill will have a huge economic impact on Serbia in terms of exports and overall GDP.”
HBIS is the largest steel producer in China and the world’s second-largest steel producer by volume, producing 47.8 million tons of steel in 2015. Globally, HBIS employs more than 130,000 workers and its products are sold in more than 120 markets. In 2015, HBIS was ranked 239 on the Fortune Global 500 list, a jump of 32 positions compared to 2014. The transaction and pledged investments are expected to have a major positive effect on Serbian GDP in 2016 and beyond. The acquisition is part of the company’s expansion and growth strategy.
The Gecić | Law team was led by partner Bogdan Gecić and included partner Nikola Aksić, special counsel Jelena Adamović, and senior associate Marija Papić who worked in close cooperation with the legal team at KPMG Serbia led by Mlađan Marjanović. International legal counsel on this transaction was provided by Cleary Gottlieb Steen & Hamilton LLP Brussels and was led by Till Müller-Ibold and included Francesco Maria Salerno.
Gecić commented: “We wish to congratulate HBIS on this precedent setting transaction. We enjoyed the opportunity to work closely with their team, the Government of Serbia, the team at Železara Smederevo and our co-counsel on this transaction. This collaboration will be tremendously beneficial for Serbia and we hope will open the doors for other Chinese investors in Serbia and the region.”
