Four Firms Digging Into BHP Billiton Breakup

Four Firms Digging Into BHP Billiton Breakup Courtesy of BHP Billiton. A BHP Billiton iron ore mine.

The megamerger between London-based Billiton and Melbourne-based BHP announced with much fanfare in March 2001 will soon be no more.

The combined company, which kept both headquarters and remained dual-listed in the United Kingdom and Australia despite having a common board of directors, announced this week that it would spin off several second-tier assets into an independent global metals and mining company tentatively dubbed NewCo and valued at $14 billion.

Helping BHP Billiton in that endeavor are a trio of leading global firms, along with the largest firm in Africa. The Deal and U.K. publication Legal Week first reported that Magic Circle firm Slaughter and May, Herbert Smith Freehills, Cleary Gottlieb Steen & Hamilton and ENSAfrica have taken the lead for BHP on the matter.

Heading up the team providing U.K. legal counsel to BHP from London-based Slaughter and May are corporate partners Richard de Carle and Susannah Macknay—the latter of whom was promoted to partner earlier this year—and tax partner Jeanette Zaman, finance partner Philip Snell, antitrust partner Michael Rowe and associates Louise Campbell, Emma Game and Elizabeth Szanto.

Slaughter and May has been a longtime legal adviser to BHP, teaming up with Sullivan & Cromwell to advise the company on its 2001 merger with Billiton. U.K. publication Legal Business notes that veteran Slaughter and May corporate partner Nigel Boardman serves as the Magic Circle firm’s relationship partner with BHP.

The American Lawyer named Boardman one of its Dealmakers of the Year in 2007 for his work advising BHP on a range of deals, including its ill-fated $165 billion hostile takeover bid for Anglo-Australian rival Rio Tinto. That deal ultimately fell apart in November 2008 because of mounting regulatory hurdles and the beginning of the global financial crisis.

Four years ago this month, Slaughter and May’s de Carle and Snell led a team advising BHP on its $38.6 billion takeover bid for Canadian fertilizer giant Potash Corp. of Saskatchewan. That deal, which saw Cleary Gottlieb also take a lead M&A role for BHP, also foundered in the face of regulatory opposition up north.

Cleary Gottlieb, which is currently advising Family Dollar in its own takeover battle with Dollar General and Dollar Tree, did not respond to a request for the names of its lawyers currently advising BHP on the spinoff of metals and mining assets. Cleary Gottlieb is serving as antitrust and U.S. corporate and tax counsel to the mining giant. The firm did grab a role this month advising longtime client ArcelorMittal, the world’s largest steel producer, on its acquisition of a 56.5 percent stake in an iron ore project in Guinea from BHP, which turned to Herbert Smith Freehills corporate partners Jennifer Bell, Greg Mulley and Bertrand Montembault for counsel on the matter.

Herbert Smith Freehills, a firm formed in late 2012 through the merger of London-based Herbert Smith and leading Australian firm Freehills, is currently providing legal advice Down Under to BHP on its spinoff plan through corporate partner and former M&A practice head Alistair Donald. Other Herbert Smith Freehills lawyers working on the breakup include corporate partners Quentin Digby, Baden Furphy and Adam Strauss.

Last year BHP named Geoff Healy, a former senior litigation partner at Herbert Smith Freehills in Sydney, to replace David Williamson as the global mining giant’s chief in-house legal counsel. Healy’s appointment came amid a reorganization of BHP’s top executive management ranks, as the company sought to cope with increased global compliance demands and a slowdown in a commodities boom spurred by China’s diminished appetite for raw materials.

Healy did not immediately respond to a request for comment on whether BHP had retained other firms around the world to advise on its proposed demerger, which will require shareholder approval, but is expected to be completed by the first half of 2015. BHP management also announced Tuesday the retirement of Karen Wood, an attorney and former chief governance and public affairs officer at the company.

ENSAfrica is serving as South African legal counsel to BHP, which will unload most of its coal mining and aluminum smelting assets in the mineral-rich country as part of spinoff plan. In recent years, BHP has sought to trim executive pay packages and sell off certain noncore assets in order to bolster its bottom line. Last year the company sold a copper mine and railway in Arizona to Canada’s Capstone Mining for $650 million, a deal that came only a few months after BHP’s $1.63 billion sale of its stake in a liquefied natural gas project in western Australia to PetroChina and $500 million divestiture of its diamond marketing business to Harry Winston.

In the U.S., Sullivan & Cromwell and Morgan, Lewis & Bockius have previously done corporate work for BHP, with both advising the company on its $12.1 billion buy of Petrohawk Energy in 2011. U.S. Senate records show that Covington & Burling, Crowell & Moring and Hogan Lovells have previously handled lobbying work for BHP, although the trio hasn’t received any quarterly payments for the past several years.

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