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As oil giants Chevron Corp. and Texaco Inc. officially merged Tuesday, Pillsbury Winthrop rejoiced at the prospect of pocketing a slice of its clients’ $150 million in merger-related expenses. Pillsbury partners Terry Kee and Terry Calvani — along with former Pillsbury Chairman Alfred Pepin Jr. — acted as lead outside counsel for Chevron in one of the biggest corporate mergers of the year. Shareholders of Chevron and Texaco voted to approve the $43 billion merger, officially closing a deal that was a year in the making and at times involved a small army of lawyers. The deal is a significant one for Pillsbury at a time when merger and acquisition work has slowed. Pillsbury would not divulge its fees for the deal, but merger and acquisition experts at competing law firms estimate Pillsbury’s take to be in the millions. According to Chevron’s S/4 proxy statement regarding the merger, the company expects merger-related expenses, including attorney, accountant and investment banker fees, to total approximately $150 million. White Plains, N.Y.-based Texaco was represented by New York-based Davis Polk & Wardwell. It’s still unclear whether either firm will continue to be lead counsel for the newly formed company, to be named ChevronTexaco Corp. and headquartered in San Francisco. But Pillsbury’s home office in San Francisco and history with Chevron would appear to give it an advantage. Pillsbury has been chief outside counsel to Chevron since the beginning of the last century, when it helped incorporate the company formerly known as Standard Oil. Pillsbury Managing Partner Marina Park would not comment on whether Chevron would remain a client, but stressed the oil giant’s value to the firm. “Chevron is one of our most important clients, not just in terms of the size of the account, but just the historical relationship that we have with them, the quality of the work and the quality of the relationship,” Park said. This is not the first time Pillsbury has been summoned to help unite Chevron with Texaco. Kee, Calvani and Pepin worked on a similar deal in 1999, but watched their efforts go up in smoke because of differences over deal terms and rumored personality clashes among top executives at the two companies. The biggest challenges this time around however were not intercompany but regulatory. The merger needed approval from the Federal Trade Commission, the Securities and Exchange Commission and a slew of foreign government agencies. And the European Union, which squashed General Electric’s bid for Honeywell earlier this summer, acted as a reminder that nothing could be taken for granted. While the European Union ended up giving the ChevronTexaco merger a quick review, the deal had to go through proceedings in 26 countries that recently adopted premerger notification review regimes. “That’s a new development,” says Calvani. “Many of the countries that reviewed this transaction didn’t have anti-trust laws last year.” As a result, explains Calvani, Pillsbury contracted attorneys in other countries, temporarily swelling its roster of attorneys working on the case to nearly 90. Back in the U.S., as Pillsbury lawyers expected, the FTC demanded that Texaco divest certain subsidiaries, such as the discovery pipeline system and its aviation business. The merger creates the second largest U.S. oil company, and the fifth largest in the world, with combined 2000 revenues of $117 billion and a market capitalization of $97 billion. The two companies, along with their Caltex joint venture, employ 57,000 people. The new company has announced plans to reduce the work force to 53,000 employees spread over 180 countries.

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