Allen & Overy and Clifford Chance have grabbed lead roles on a pair of large chemical industry mergers, while another group of top global firms are advising on several other notable transactions in the same sector.
German drug and chemical conglomerate Merck KGaA announced Thursday that it has agreed to buy specialty chemicals manufacturer AZ Electronics Materials for roughly $2.6 billion in cash.
Allen & Overy corporate partners Richard Browne and Michael Ulmer in London and Frankfurt, respectively, are leading a team from the firm representing Merck on the matter. Senior associate Annabelle Crocker is also advising on the deal.
The Magic Circle firm has represented the Darmstadt, Germany–based company on previous matters. Francois Naef is Merck’s group general counsel and in-house head of corporate legal and compliance. He has held those titles since the sudden death of predecessor Tilman Schmidt-Lorenz in 2009. German lawyer Karl-Ludwig Kley serves as chairman of Merck’s executive board.
Founded in 1668, Merck is the world’s oldest chemical and pharmaceutical company. It entered the United States in 1887 in a move that produced Whitehouse Station, N.J.–based drug giant Merck & Co. The latter separated from its onetime German parent during World War I, and the two companies remain independent entities.
Merck’s acquisition of AZ is likely to help the German company expand its offerings to the electronics industry given that companies such as Samsung, Sony and Toshiba already use AZ’s products in semiconductors, smartphones and liquid crystal flat-screen televisions.
Allen & Overy’s Magic Circle rival Clifford Chance—the hourly rates of lawyers at London’s top firms are hitting record highs, irking some—is advising Luxembourg-based AZ on its proposed sale to Merck through corporate partner Tim Lewis in London. Clifford Chance advised AZ three years ago when private equity giant The Carlyle Group exited its investment in the company via an initial public offering that raised $700 million on the London Stock Exchange.
AZ’s board has recommended that shareholders accept Merck’s bid. Philana Poon, a general counsel of Hong Kong–based holding company PCCW, is an independent member of the AZ board.
Clifford Chance and Allen & Overy also have their hands in another big merger in the chemical industry. Saudi Arabia’s Sahara Petrochemicals and Saudi International Petrochemical (Sipchem) officially announced plans this week to complete a share-swap merger in the first half of 2014 that will create a combined petrochemical company worth an estimated $5 billion.
Allen & Overy corporate partners Ian Ingram-Johnson and Andrew Schoorlemmer in Dubai are advising Sipchem on the deal along with senior associate David Foster and partner Zeyad Khoshaim, who under Saudi law maintains his own local affiliate in Riyadh. Sipchem’s general counsel is Keith Hutton.
Clifford Chance corporate partner Mike Taylor in Dubai and longtime Saudi affiliate Al-Jadaan & Partners, a Riyadh-based shop that forged a mixed local and foreign partnership with the Magic Circle firm earlier this year, are counseling Sahara on its proposed merger with Sipchem. The two Saudi companies began tie-up talks this summer.
Clifford Chance also advised Princeton-based specialty chemical company Rockwood Holdings this week on the formation of a $1 billion lithium joint venture with China’s Chengdu Tianqi Industry Group, according to sibling publication The Asian Lawyer.
Corporate partners Arndt Stengel, Michael Lishman and Emma Davies and antitrust partner Marc Besen are leading a cross-border team from the firm advising Rockwood, which was formed by private equity giant KKR in 2000 before it went public through a $575 million IPO five years later. (Rockwood’s general counsel is Thomas Riordan.)
Rockwood lost out to Chengdu Tianqi earlier this year in a bid to acquire Perth-based Talison Lithium, the world’s largest producer of lithium ore, which is used to produce electric car batteries, iPads and laptop computers. Simpson Thacher & Bartlett had been representing Rockwood on its bid to buy Talison.
Rockwood is now set to acquire a 49 percent stake in Talison from Chengdu Tianqi, with the deal expected to close in the first quarter of next year, pending regulatory approval. Bloomberg reports that Rockwood will put $196 million in equity into the joint venture, with Chengdu Tianqi kicking in another $204 million.
Leading Australian firm Allens, an alliance partner of Magic Circle shop Linklaters, is advising Chengdu Tianqi through a team of lawyers led by M&A cohead Guy Alexander, corporate partner Marcus Clark, antitrust partner Fiona Crosbie, energy partner Mark McAleer, finance partner Mark Kidston and senior associates Damon Angus, Jessica Chung and Matthew Ireland.
Rockwood has also been keeping several Am Law 100 firms busy in recent months with transactional work.
Hughes Hubbard & Reed, Willkie Farr & Gallagher and Skadden, Arps, Slate, Meagher & Flom advised the company in September on its $1.3 billion sale of five nonstrategic businesses. Willkie also advised Rockwood this summer on the $635 million sale of its clay-based additives unit to German specialty chemicals group Atlanta and nearly $2 billion sale of German ceramics company CeramTec to European private equity firm Cinven, according to our previous reports.
Elsewhere, Osler, Hoskin & Harcourt and Covington & Burling counseled Canadian sulfuric acid producer Chemtrade Logistics Income Fund on its $860 million acquisition this week of the General Chemical Holding Co. from New York–based private equity firm American Securities LLC.
Osler, a top Canadian firm, served as corporate counsel to Toronto-based Chemtrade, while Covington handled regulatory aspects of the transaction through antitrust partner James O’Connell, IP partner Lee Tiedrich, environmental senior of counsel E. Donald Elliott, international trade of counsel David Grace and real estate of counsel Heather Haberl.
Lorie Waisberg, a former partner at Canadian firm Goodmans, serves as chairman of Chemtrade’s board of trustees. Fellow trustee and Chemtrade CEO Mark Davis was once a partner at Toronto’s Borden Elliot, a firm now known as Borden Ladner Gervais after a five-way merger in 2000. Chemtrade’s corporate secretary is Susan Paré.
Michael Lubowitz, cohead of the private equity and M&A practice at Weil, Gotshal & Manges, is leading a team from the firm advising American Securities that includes tax partner Mark Hoenig and associates Kaitlin Descovich, Peter Milligan, Lane Morgan, Naomi Munz, Sanil Padiyedathu and Sandra Rutova. The private equity firm’s general counsel Eric Schondorf once worked at Weil, as did American Securities managing director Lee Dranikoff.
The chemical-related deal work doesn’t figure to stop there.
The Dow Chemical Company announced this week plans to shed $5 billion in assets—including its chemical unit—in an effort to streamline its operations. The Midland, Mich.–based company is the world’s second-largest chemical concern after market leader BASF.
Shearman & Sterling has traditionally handled M&A work for Dow, counseling the company on the $500 million sale in October of a noncore unit to W.R. Grace & Co. Dow’s general counsel is Charles Kalil.