The Las Bambas copper mine in Peru. (Courtesy of Siemens AG)
Dentons and White & Case have grabbed lead roles advising a consortium of state-owned Chinese companies on their acquisition of a Peruvian copper mining project from Glencore Xstrata for $5.85 billion. It’s one of two major M&A deals that Glencore announced Monday.
The sale of the Las Bambas project to a group led by Melbourne-based MMG Ltd., a subsidiary of metals and mineral trading company China Minmetals Corp., comes almost a year after Glencore Xstrata was formed via the $65 billion merger that joined the two legacy companies.
Initially structured as a merger of equals, Switzerland-based Glencore eventually ended up buying London-based Xstrata for roughly $34 billion. As part of the sweeping regulatory approval process required to close the deal, Glencore agreed to relinquish its stake in Xstrata’s Las Bambas project to a buyer approved by Chinese authorities.
That buyer has now come forward in the form of a consortium led by MMG as China—the world’s largest consumer of copper—seeks greater control of its global mineral supply lines. MMG owns 62.5 percent of the consortium, while Hong Kong–based Guoxin International Investment Corp. and Citic Metal own stakes of 22.5 percent and 15 percent, respectively.
Sarah Zeng, an energy and infrastructure M&A partner who joined Dentons’ Beijing office two years ago, is leading a cross-border team from the firm advising the MMG–led consortium. The other Dentons lawyers working on the matter include M&A partner Alan Hutchison and energy regulatory partner Carter Simpson.
The consortium is also being advised by a White & Case team that includes global head of mining John Tivey, China practice head Xiaoming Li, M&A partner Julian Chung, finance partner Fernando de la Hoz, energy and infrastructure partner Rebecca Campbell, corporate partner Anthony Vasey, corporate counsel Natalie Cheng and senior associate Matthew Love.
“This transaction played to the strengths of White & Case as a truly global firm, including our strong Latin American presence and capabilities in Hong Kong and Beijing M&A,” Tivey said a statement describing the deal. “This transaction underlines White & Case’s deep expertise in key strategic locations.”
Tivey joined White & Case two years ago this month from Australian legal giant Freehills, which merged in late 2012 with British firm Herbert Smith. Chung and Campbell are also recent lateral hires, with Campbell joining White & Case from mining giant BHP Billiton in early 2013 and Chung coming aboard from Ropes & Gray’s Hong Kong office last June, according to sibling publication The Asian Lawyer. (Chung joined Ropes in 2012 from Norton Rose.) The White & Case lawyers are working closely on the Las Bambas deal with MMG general counsel Nick Myers, deputy general counsel Allison Purdey and group counsel Leigh Mollison.
When Glencore and Xstrata first announced their plans to combine in February 2012, Linklaters snagged the top transactional role advising Glencore on the megamerger and Magic Circle rival Freshfield Bruckhaus Deringer took the lead for Xstrata, according to our previous reports.
U.K. publication Legal Week reported last summer that Linklaters had snagged the lead role advising the combined Glencore Xstrata on its sale of the Las Bambas project. Over the past year, China Minmetals eventually emerged as the sole bidder for the strategic copper asset, which Glencore must unload to satisfy both the Chinese regulatory requirements and to pay down its own debt. (Glencore CEO Ivan Glasenberg, who bested former Xstrata boss Mick Davis to take the leadership reins at the combined company, has acknowledged that Glencore paid about $8.8 billion more than it should have to execute the merger.)
Linklaters senior corporate partner Charles Jacobs—who was recently named to the board of directors of London-based mining company Fresnillo—is leading a team advising Glencore on the Las Bambas sale that includes M&A partner David Avery-Gee, finance partner Robert Cleaver and antitrust partner Christian Ahlborn.
Legal Week reports that Clifford Chance is advising a group of lenders providing financing for the transaction. Clifford Chance and Linklaters counseled Glencore last year on its first postmerger bond offering, according to a report by rival U.K. publication The Lawyer. Richard Marshall is Glencore’s general counsel and John Burton serves as corporate secretary for the company, which also announced Monday that it has agreed to acquire Calgary-based Caracal Energy for $1.35 billion.
Clifford Chance is advising Glencore on its purchase of Caracal—which owns oil and gas assets in the central African nation of Chad—along with leading Canadian firms McCarthy Tetrault and Torys. The transaction effectively scuttles Caracal’s planned $627 million acquisition of Calgary-based TransGlobe Energy, which was announced last month and would have extended Caracal’s reach into Egypt.
Stikeman Elliott was advising Caracal in connection with that now-terminated transaction. Blake, Cassels & Graydon—the top legal brand in Canada, according to a survey released last week—had been advising TransGlobe.