The market may have responded unkindly to Freeport-McMoRan Copper and Gold’s $9 billion bid to create a massive conglomerate on Wednesday, but for five Am Law 100 firms it was just another opportunity to capitalize on the seemingly endless gusher of M&A work emanating from the natural resources sector.
The proposed transaction by Phoenix-based Freeport-McMoRan, one of the world’s largest gold and copper miners, could create a combined company worth an estimated $60 billion, including debt, according to trade publication the Oil & Gas Journal.
Terms of the deal call for Freeport-McMoRan to pay $6.9 billion in cash-and-stock for Plains Exploration and Production and another $3.4 billion in cash for McMoRan Exploration Company, which shares a name with its would-be acquiror stemming from a 1994 spin-off.
Wachtell, Lipton, Rosen & Katz corporate partner David Shapiro, antitrust partner Nelson Fitts, executive compensation and benefits partner Jeannemarie O’Brien, restructuring and finance partner Joshua Feltman, and tax partner Joshua Holmes are leading a team from the firm advising Freeport-McMoRan on the proposed transaction.
Cravath, Swaine & Moore financial institutions chair B. Robbins Kiessling and corporate practice managing partner William Fogg are providing banking and securities counsel to JPMorgan Chase, which is serving as lead arranger for $9.5 billion in committed financing in connection with the two mergers.
A press release touting the merits of the proposed transaction proclaims that the combined entity will be a “premier U.S.–based natural resource company with an industry leading global portfolio of mineral assets, significant oil and gas resources, and a growing production profile.”
The two deals effectively return Freeport-McMoRan to the oil and gas business it left in 1994 following its spin-off of New Orleans–based McMoRan Exploration. But with new technologies helping enhance the United States’s status as a growing energy giant, Freeport-McMoRan chose to reinvest in the sector, according to the Financial Times.
Freeport-McMoRan’s last major deal of this size was its $26 billion acquisition of Phoenix-based copper producer Phelps Dodge in 2006, a deal that saw Davis Polk & Wardwell and Jones, Walker, Waechter, Poitevent, Carrere & Denegre advise the acquiror, while the target was represented by Debevoise & Plimpton.
L. Richards McMillan II, a former Jones Walker partner, has served as general counsel of Freeport-McMoRan since 2007. Dustan McCoy, a former general counsel for conglomerate Brunswick Corporation, is a member of the company’s board of directors, as is banking billionaire Gerald Ford. ( As previously noted by The Am Law Daily, Ford is unrelated to our country’s 38th president, but earned a law degree from Southern Methodist University, whose football stadium bears his name.)
Houston-based Plains E&P has turned to Latham & Watkins for counsel on its proposed sale to Freeport-McMoRan. Michael Dillard, managing partner of the firm’s Houston office, and oil and gas industry cochair Sean Wheeler are leading a team from the firm working on the deal that includes M&A chair Mark Gerstein, tax partners Laurence Stein and John Clair, global employee benefits cochair James Barrall and partner Laurence Seymour, antitrust partner E. Marcellus Williamson and counsel Sydney Smith, capital markets chair and finance partner Patrick Shannon, litigation partner Blair Connelly, global environmental transactions chair Joel Mack, environmental partners Claudia O’Brien and Michael Romey, and mining industry partner Christopher Langdon.
Latham advised Plains E&P in September on its $5.6 billion purchase of deepwater oil and gas assets from British oil giant BP, according to our previous reports. The deal netted Latham corporate partner Jeffrey Munoz in Houston our Dealmaker of the Week honors. Munoz joined the firm in May from Vinson & Elkins, the latest in a series of lateral hires in Houston by Latham since it opened in the city back in 2010.
Shortly after Latham raided Vinson for four partners in Houston early that year, Dillard joined Latham from Akin Gump Strauss Hauer & Feld and Wheeler was hired from Baker Botts, according to our previous reports.
Last year Vinson also lost private equity partner Rodney Moore to Weil, Gotshal & Manges, where he splits his time between the firm’s offices in Dallas and Houston, and is currently part of a team from the firm advising McMoRan on its potential combination with Plains E&P and Freeport-McMoRan.
Leading the Weil team advising McMoRan is corporate chair and M&A expert Michael Aiello. The company was introduced to Aiello by Weil bankruptcy partner Michael Walsh in New York, who had once worked with one of McMoRan’s directors on a restructuring matter.
Other Weil lawyers working on the matter include capital markets head Matthew Bloch, banking and finance partner Richard Ginsburg, tax partner Jared Rusman, IP partner Charan Sandhu, litigation partners John Neuwirth and Gregory Danilow, environmental partner Annemargaret Connolly, employee benefits partner Amy Rubin, antitrust head Steven Newborn, and real estate partner Samuel Zylberberg. Douglas Currault, another former Jones Walker partner, serves as general counsel for McMoRan.
Former Andrews Kurth partner John Wombwell is a member of the board at McMoRan and also serves as general counsel and secretary of Plains E&P. At nearly $5 million in annual compensation, Wombwell is one of the most richly rewarded in-house lawyers in the Lone Star State, according to sibling publication Texas Lawyer.
Cleary Gottlieb Steen & Hamilton corporate partner Victor Lewkow is representing Barclays Capital, which is serving as financial adviser to Plains E&P on the deal. Reuters reports that the megamerger will concentrate Freeport-McMoRan’s oil and gas assets in the U.S., while its mining properties are primarily located abroad.
Completion of the complex transaction is expected to occur by the second quarter of next year, pending shareholder and regulatory approvals.