Skadden, Weil Gotshal Handle Sale of Russian Steel U.S. Subsidiaries
Russian steelmaker OAO Severstal has agreed to sell its North American subsidiaries to U.S. competitors Steel Dynamics Inc. and AK Steel Holding Corp. for a combined $2.3 billion in two separate transactions.
The deal represents OAO Severstal’s exit from the U.S. market, which began in 2010 with the sale of factories in Illinois and Ohio, according to Bloomberg. Earlier this month, Severstal agreed to sell its coal unit to Canada’s Corsa Coal for $140 million.
Steel Dynamics, based in Fort Wayne, Indiana, is purchasing Severstal Columbus LLC in Mississippi for $1.625 billion in a combination of cash and debt. AK Steel, based in West Chester, Pennsylvania, will get Severstal Dearborn in Michigan for $700 million in cash.
Talks about the sale began at the end of 2013, OAO Severstal said, before tensions between the U.S. and Russia escalated over Ukraine. The deal’s completion is subject to customary closing conditions. The board of each company has approved the transaction, which is expected to close at the end of 2014.
Skadden, Arps, Slate, Meagher, & Flom represented OAO Severstal. AK Steel turned to Weil, Gotshal, & Manges and Fort Wayne-based Barrett & McNagny counseled Steel Dynamics.
Skadden’s team for OAO Severstal includes antitrust partner Clifford Arnson; labor and employment partner John Furfaro and counsel Richard Kidd, as well as international litigation partner Timothy Nelson, corporate associates Lance Phillips and Mariska Richards, all in New York; and M&A partners Gary Cullen and Shilpi Gupta and tax partner Sarah Ralph in Chicago, and environmental counsel ElizabethMalone in Washington, D.C.
Weil’s New York team for AK Steel is composed of M&A partner Raymond Gietz, tax partner Helyn Goldstein; banking and finance partner Morgan Bale; capital markets partner Todd Chandler; private equity partner Joseph Verdesca; employment litigation counsel Lawrence Baer; and benefits partner Amy Rubin, and associates Naomi Munz, M&A; Joseph Santo, private equity; Andrew Pelzer, tax.; Brian Drozada and Thomas Mastoras, banking and finance; Melissa Meyrowitz, real estate, and Adam Mendelowitz, benefits; and in Washington, D.C., antitrust partner Laura Wilkinson.
Steel Dynamics tapped Barrett & McNagny, whose team was led by corporate and M&A senior counsel Robert Walters and M&A partner John Martin. Also on the deal were tax partner Jeff Woenker, business and M&A partners Zachary Klutz and Richard Fox, employee benefits partners N. Thomas Horton and Thomas J. Markle, environmental partner David Steiner, and labor and employment partner Anthony Stites, and securites law associate Marcus Heminger.
Merger in Gaming Industry Handled by Cravath, Weil Gotshal, Skadden
Casino and lottery game maker Scientific Games Corporation said last week it has agreed to buy Bally Technologies, Inc. for $5.1 billion in cash and debt in a deal that continues a streak of consolidations in the gaming industry.
As part of the deal, New York-based Scientific Games will pay $83.30 in cash for each of Bally’s outstanding shares—a 38 percent premium over the Las Vegas-based game maker’s closing price on Thursday. The deal will be financed with $3.3 billion in cash and $1.8 billion in assumed debt, Scientific Games said in a news release.
The boards of directors from both companies have unanimously approved the transaction, which is expected to close in early 2015 and is subject to Bally shareholder, antitrust and gaming regulatory approvals.
Scientific Games sells lottery and casino technology and content to operators, while Bally sells casino-management systems, table games and electronic game table systems.
The companies together hold licenses in more than 300 gaming jurisdictions worldwide, according to Scientific Games.
Cravath, Swaine & Moore and Latham & Watkins represented Scientific Games, while Skadden, Arps, Slate, Meagher & Flom advised Bally.
The New York Cravath team for Scientific Games included partners Robert I. Townsend III and George F. Schoen, M&A; Eric W. Hilfers, executive compensation and benefits; Michael L. Schler, tax; Christine Varney and Yonatan Even, antitrust; David Kappos, IP; senior attorney Annmarie Terraciano, environmental, and Gary Eisenman, real estate. Associates included were Jonathan Davis, Edmund Mokhtarian, and James Pickel Jr., M&A; Jarrett Hoffman, execuitve compensation and benefits; Stephen Severo, tax, Pierre Gemson and Caitlin Fitzpatrick, antitrust, and Benjamin Landry, IP. Matthew Bobby, executive compensation and benefits, Catalina Parkinson, M&A and Allison Davido, antitrust, are not yet admitted to the bar, but also worked on the merger.
Latham & Watkins advised Scientific Games with a New York team led by corporate partners Marc Jaffe and Senet Bischoff, and banking partner Michele Penzer, along with corporate associates Emily Corbi and Jane Hogan. In Washington, D.C. werebanking partners Manu Gayatrinath and Scott Forchheimer, and banking associate Katherine Putnam.
The New York Skadden team for Bally was led by M&A partners Howard Ellin and Ann Beth Stebbins. Antitrust partners Clifford Aronson and Alec Chang, IP partner Bruce Goldner, banking counsel M. Janine Jjingo, derivatives counsel Justin Michael, executive compensation partner Regina Olshan, tax partner David Rievman, banking partner Stephanie Teicher and corporate finance partner Michael Ziedel also advised. Associates included Trevor Allen, tax, Tim Cruickshank, corporate fianace,Travis Scher, Kyle Seifried and Kyle Hatton, M&A, Shalom Huber, executive compensation and benefits, Matthew Nemeroff, banking, Rebecca Rodal, IP, and Michael Sheerin, antitrust, and summer associate Peyton Gully, M&A.
The merged company is expected to realize $220 million in cost savings and $25 million of annual capital expenditure savings by the end of the second year following the transaction’s closing, while adding immediately to earnings per share and cash flow.