ROMANIA Law and Practice Contributed by: Ileana Glodeanu, Andreea Cărare, George Ghitu and Delia Dumitrescu, Wolf Theiss
6.3 Dispute Resolution for Consideration Structures It is common to have a dispute resolution mechanism in place for both locked-box and completion accounts consideration structures in private equity deals. In the case of disagreement on completion accounts, the parties usually agree on expert determination pro - ceedings and, depending on the general agreed terms of governing law and disputes under the transaction documents, further arbitration or local court proceed - ings will apply. Arbitration is preferred for its confi - dentiality and efficiency, while local court proceedings may be necessary depending on the specific circum - stances of the dispute. A similar mechanism is used with respect to locked- box consideration structures – ie, the parties agree on an expert determination, which is further supple - mented by arbitration or local court proceedings. There is a growing trend towards tailoring expert determination clauses carefully, especially in high- value or cross-border deals, with greater specificity around the scope of the expert’s authority, time limits for appointment and determination, as well as access to information and co-operation obligations. 6.4 Conditionality in Acquisition Documentation Acquisition agreements in private equity deals are usually subject to various conditions, with the most common being: • mandatory and suspensive regulatory conditions such as merger control clearance and FDI screen - ing (which has grown in importance in Romania, and across the EU, since 2023–24, particularly in sectors such as energy, telecom, infrastructure, healthcare and data); • financing (eg, bank consents); • no material adverse change (which is not as com - mon as in the USA but more frequent than in the rest of Europe); and • most critical legal, financial and/or tax issues identified during the due diligence needing to be addressed/remedied prior to closing.
Conditions concerning third-party consents (such as key contractual counterparties) are typically encoun - tered in transactions involving start-up businesses or SMEs, and in certain sectors where key contracts are fundamental to the value of the business, such as ser - vices and technology. Shareholder approval is typically only a condition where required by law or the articles of association of the parties involved. A growing trend in private equity transactions is the inclusion of sector-specific conditionality, which was not seen in previous years. Moreover, material adverse change clauses are currently being tailored more nar - rowly to reduce ambiguity around what qualifies as a material change. The overall trend in the market is towards minimising conditionality to enhance deal certainty, particularly in competitive sale processes. 6.5 “Hell or High Water” Undertakings “Hell or high water” undertakings are rather uncom - mon in the local market, especially given that deals are not notably seller-friendly. Buyers mostly tend to agree on prompt filings, consulting with the seller (if needed) and keeping the seller informed about the approval process (if requested), but are reluctant to accept unconditional obligations to secure regulatory approvals, especially where significant remedies may be required. There is usually a distinction between merger control and foreign investment conditions, with the latter attracting even more caution as the process can be less predictable and the remedies required more far-reaching. The EU Foreign Subsi - dies Regulation (FSR) regime is increasingly relevant, but does not generally result in more onerous under - takings from buyers. The overall approach reflects a market that is balanced or buyer-friendly, with a focus on limiting the buyer’s exposure to regulatory risk. Where regulatory risk is material, it is more common to see tailored risk-sharing clauses, walk-away rights (if regulatory approval is not obtained by a longstop date) and/or limited remedy obligations, agreed on a case-by-case basis.
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