This week, a pair of $48 billion deals, along with their legal teams, reign supreme.
Reports surfaced Wednesday that a health insurance megamerger is imminent between Indianapolis-based Anthem and Bloomfield, Connecticut-based Cigna, with the former seeking to acquire the latter in a $48 billion cash-and-stock deal.
The insurance industry has been particularly busy consolidating of late, with The Am Law Daily noting earlier this month the half-dozen firms handling Aetna’s $37 billion acquisition of Humana, a deal that took place immediately following the U.S. Supreme Court’s latest rejection of a challenge to the Affordable Care Act.
White & Case and veteran M&A partner Daniel Dufner Jr.—a former Am Law Daily Dealmaker of the Week for his work advising WellPoint on its $4.9 billion acquisition of rival health insurer Amerigroup in 2012—has picked up the lead role advising Anthem. (Anthem used to be called WellPoint, having adopted its current name last year.)
Cigna, the target, has turned to Cravath, Swaine & Moore for lead counsel on the potential deal. Cadwalader, Wickersham & Taft is advising Cigna on antitrust matters, while Sidley Austin is serving as health care regulatory counsel to the company. Latham & Watkins is representing the lead arrangers providing financing for the proposed combination.
On Tuesday, in another megadeal at a different stage of completion, the U.S. Department of Justice announced it would not challenge AT&T’s $48 billion purchase of satellite television operator DirecTV. The Federal Communications Commission is also expected to give its go-ahead to the transaction, which as noted by The Am Law Daily yielded roles for a dozen firms when it was announced in May 2014.
Intense antitrust scrutiny foiled AT&T’s previous bid to buy T-Mobile USA for $39 billion in 2011, a tie-up the former abandoned in December of that year in the face of Justice Department opposition. The busted deal saw AT&T pay a $4 billion breakup fee and raised questions about when deals go bad; how much blame do the legal advisers receive? In AT&T’s case, it appears the telecom giant didn’t hold a grudge.
The Litigation Daily, a sibling publication, reported this week that AT&T’s legal team on the T-Mobile deal—Sullivan & Cromwell, Arnold & Porter, Crowell & Moring, Sidley and Washington, D.C.–based Kellogg, Huber, Hansen, Todd, Evans & Figel—got the call for the DirecTV transaction.
In other M&A news …
Lockheed Martin/United Technologies’ Sikorsky Aircraft
In a deal of defense contractors, Bethesda, Maryland-based Lockheed Martin will buy Sikorsky Aircraft, a maker of Black Hawk helicopters, from Hartford, Connecticut-headquartered United Technologies. The $9 billion price tag reads more like $7.1 billion, taking into account a $1.9 billion tax benefit, according to the acquirer.
At the same time as the deal’s announcement Monday, Lockheed Martin, which raked in roughly $45 billion in sales last year, said it would look into alternatives for its government IT and technical services businesses. The Sikorsky acquisition is expected to close by the first quarter of next year.
Legal Advisers: Davis Polk & Wardwell, Fried, Frank, Harris, Shriver & Jacobson and McDermott Will & Emery for Lockheed Martin; and Wachtell, Lipton, Rosen & Katz for United Technologies.
Gaming and Leisure Properties Inc./Pinnacle Entertainment Inc.
Wyomissing, Pennsylvania-based GLPI has agreed to buy the real estate assets of Las Vegas-based Pinnacle in an all-stock deal that values the assets at $4.75 billion. According to a statement issued by both companies announcing the transaction Tuesday, the deal “will create the third-largest publicly traded triple-net” real estate investment trust. The resulting entity’s portfolio will consist of 35 hotel and casino properties spanning 14 states if the deal closes as expected in the first quarter of 2016.
Legal Advisers: Wachtell for GLPI; and Skadden, Arps, Slate, Meagher & Flom and Gibson, Dunn & Crutcher for Pinnacle.
The Blackstone Group and Corsair Capital/First Eagle Investment Management
Private equity funds managed by Blackstone and Corsair will make a majority long-term investment, valued at $4 billion, in New York-based First Eagle. The deal for First Eagle, which has over $100 billion in assets under management, was announced Monday. It is expected to close by year’s end, after which First Eagle will continue to operate independently.
Legal Advisers: Simpson Thacher & Bartlett for Blackstone and Corsair; and Skadden for First Eagle.
St. Jude Medical/Thoratec
St. Paul, Minnesota-based St. Jude Medical has agreed to acquire Pleasanton, California-based Thoratec, which makes devices to combat heart failure, for $3.4 billion. Announced Wednesday, the all-cash transaction is expected to close in the fourth quarter. The Wall Street Journal reported that the deal is the largest in St. Jude’s history, the runner-up being the company’s $1.25 billion buy of Advanced Neuromodulation Systems nearly a decade ago.
Legal Advisers: Gibson, Dunn & Crutcher for St. Jude Medical; Weil, Gotshal & Manges for Bank of America Merrill Lynch in providing bridge financing; and Latham for Thoratec.
SunEdison Inc./TerraForm Power Inc./Vivint Solar
SunEdison, a Maryland Heights, Missouri-based renewable energy company, will buy Bethesda, Maryland-based Vivint Solar for $2.2 billion. At deal closing, which is expected to come by the fourth quarter, SunEdison’s TerraForm will take on the target’s rooftop solar portfolio for $922 million. Just last month TerraForm agreed to pay $2 billion to Chicago-based Invenergy for a portfolio of wind power plants.
Legal Advisers: Kirkland & Ellis and Skadden for SunEdison and TerraForm; Cleary Gottlieb Steen & Hamilton for TerraForm’s corporate governance and conflicts committee; and Wilson Sonsini Goodrich & Rosati for Vivint Solar.
The Home Depot/Interline Brands Inc.
The Home Depot, headquartered in Atlanta, has constructed a $1.63 billion purchase of Jacksonville, Florida-based Interline, which distributes and markets products in the maintenance, repair and operations field. The acquisition, aimed at further reaching a rebounding residential rental market, is The Home Depot’s largest in roughly 10 years, The Wall Street Journal reported. Home Depot, a home improvement honcho that saw sales top $83 billion in 2014, announced Wednesday a deal that it expects to close in the third quarter.
Legal Advisers: Cleary Gottlieb for The Home Depot; and Fried Frank for Interline.
In a union of international auto suppliers, Canada’s Magna will pay $1.9 billion for German transmission specialist Getrag, which has joint ventures with Ford Motor Co. and Chinese car companies. German legal publication Juve reported that two high-powered local firms have picked up work on the deal, which is expected to close by year’s end.
Legal Advisers: Hengeler Mueller for Magna; and Gleiss Lutz for Getrag.
As part of a divestment process for the merger of cement-making behemoths Holcim and Lafarge, the combined LafargeHolcim plans to pay $1.63 billion for Anglo American’s 50 percent stake in LafargeTarmac, which will, in turn, be offloaded by the end of this month. In February, LafargeHolcim agreed to sell $7.3 billion in assets to fellow industry player CRH in order to satisfy antitrust regulators.
Legal Advisers: Cleary Gottlieb for LafargeHolcim; and Linklaters for Anglo American.
Genesis Energy/Enterprise Products Partners
EPP is selling its offshore pipeline and midstream energy services assets in the Gulf of Mexico to Genesis for $1.5 billion in cash. The two Houston-based master limited partnerships expect their deal to close in the third quarter, according to sibling publication Texas Lawyer.
Legal Advisers: Akin Gump Strauss Hauer & Feld for Genesis; and Andrews Kurth for EPP.
DUET Group/Energy Developments Ltd.
Sydney-based asset manager DUET has bid about $1.4 billion for Energy Developments, which owns power stations in Australia, Europe and the United States. Australian private equity firm Pacific Equity Partners currently holds a majority stake in Energy Developments, a clean energy producer that supplies electricity to mines and towns in remote areas, according to sibling publication The Asian Lawyer.
Legal Advisers: Allens and Norton Rose Fulbright for DUET; and Gilbert + Tobin for Energy Developments.
Nikkei/Pearson’s FT Group
A media buy made big news as the U.K.’s Pearson agreed to sell its business-focused entity FT Group—owner of the Financial Times—to Japan’s leading media company Nikkei for $1.3 billion. Total circulation for FT print and digital is 737,000, according to Pearson, with the latter representing 70 percent of this number. The Asian Lawyer reports that the deal, announced Thursday, is expected to close in the fourth quarter of the year.
Legal Advisers: Skadden for Nikkei; and Freshfields Bruckhaus Deringer for Pearson.