M&A (Merger & acquisition) sign with people icon linked as network on businessman hand (Kritchanut)
League table rankings for the third quarter of 2016 show global transactional volume plummeting in the aftermath of the U.K.’s mid-June vote to leave the European Union.
Global and European M&A deal volume in the third quarter slipped to its lowest levels in three years, according to data released last week by Mergermarket and cited by London-based sibling publication Legal Week. Global deal volume was down 20 percent from the same time last year.
Despite the downturn in deal activity, White & Case global M&A head John Reiss had a positive outlook on the post-Brexit transactional landscape. The firm took the top global spot for legal advisers by M&A volume on tables released by Bloomberg and Mergermarket.
“After Brexit, commentators struck the death knell for M&A. It has had some impact, particularly on certain industries in the U.K., but its impact is, and will be, limited,” Reiss told Legal Week. “M&A is a strategic imperative and won’t stop because of Brexit. We have had two and a half years of enormous activity and I do believe the third quarter slowdown was simply the M&A market taking a collective breather.”
In the third quarter, White & Case represented a pair of financia l advisers on two major cross-border deals: Credit Suisse AG in its role for China National Chemical Corp. on its $46 billion buy of Swiss agrochemical giant Syngenta AG and Mizuho Securities Co. Ltd. for Japan’s SoftBank Group Corp. on its $32 billion buy of ARM Holdings plc. White & Case also counseled the Qatar Investment Authority on its $622 million purchase of a stake in the owner of New York’s Empire State Building, according to sibling publication the New York Law Journal. (White & Case has also reportedly been hired by a special committee at CBS Corp. on a proposed combination with Viacom Inc.)
Davis Polk & Wardwell trailed White & Case in Mergermarket’s quarterly global M&A tables, while Sullivan & Cromwell took the second spot in Bloomberg’s rankings. League tables, of course, are at best an imperfect science when it comes to evaluating M&A prowess. As previously noted by The American Lawyer, varying metrics for counting deals and the different types of transactions measured by competing publishers can skew results.
In other M&A news …
Avolon Holdings Ltd./CIT Commercial Air
New York-based commercial lending giant CIT Group Inc. announced on Oct. 6 the sale of its aircraft leasing business to Avolon, which is owned by Chinese billionaire Chen Feng’s HNA Group Co. Ltd., in a $10 billion deal that will create the world’s third-largest aircraft lessor. The deal is expected to close in the first quarter of 2017.
Legal Advisers: Wachtell, Lipton, Rosen & Katz and Sullivan & Cromwell for CIT; Weil, Gotshal & Manges and Freshfields Bruckhaus Deringer for Avolon.
Sompo Holdings Inc./Endurance Specialty Holdings Ltd.
Sompo, one of Japan’s largest property insurers, is poised to pull off the second-largest acquisition ever by an insurer from that country through its $6.3 billion buy of Bermuda-based Endurance. The deal, announced Oct. 5, will help Sompo expand its operations overseas at a time of diminishing returns in Japan. Sompo’s acquisition of Endurance is the latest in a series of notable transactions in the insurance space, according to Legal Week.
Legal Advisers: Shearman & Sterling for Sompo; Davis Polk & Wardwell for Citigroup Inc. as financial adviser to Sompo; Skadden, Arps, Slate, Meagher & Flom for Endurance; Willkie Farr & Gallagher for Morgan Stanley as financial adviser to Endurance.
Bass Pro Shops LLC/Cabela’s Inc.
Springfield, Missouri-based Bass Pro Shops is poised to acquire rival outdoor retail giant Cabela’s in a $5.5 billion deal that will also see the target sell its credit card business to Capital One Financial Corp., which reached a 10-year partnership with the acquirer to issue cards to Cabela’s customers. The merger, announced Oct. 3, is expected to close in the first half of 2017. Activist investor Elliott Management Corp., the hedge fund giant founded by Harvard Law School graduate Paul Singer, will sell its 11 percent stake in Sidney, Nebraska-based Cabela’s as part of the deal.
Legal Advisers: Latham & Watkins, Morrison & Foerster and O’Melveny & Myers for Bass Pro Shops; Davis Polk for The Goldman Sachs Group Inc. and its merchant banking division as financier for the deal; Sidley Austin and Koley Jessen for Cabela’s.
Henderson Group plc/Janus Capital Group Inc.
London-based investment management giant Henderson Group unveiled on Oct. 3 its $2.59 billion all-stock acquisition of Denver-based Janus Capital in a merger creating an asset manager named Janus Henderson Global Investors that will have $320 billion in assets under management, according to Legal Week. The trans-Atlantic transaction, which will help the combined entity better compete with investment giants like BlackRock Inc., is expected to close in the second quarter of 2017.
Legal Advisers: Freshfields for Henderson; Skadden for Janus.
Aboitiz Power Corp./Sithe Global Power
Manila-based Aboitiz announced on Oct. 4 its $1.2 billion acquisition of two coal-fired power plants in the Philippines owned by Sithe Global Power, a New York-based company backed by private equity giant The Blackstone Group LP. Aboitiz’s Therma Power Inc. unit will buy the two plants in Bataan in a transaction that awaits the approval of Philippine regulators.
Legal Advisers: Sidley and Puyat Jacinto & Santos for Aboitiz; Kirkland & Ellis and the Puno Law Offices for Sithe.
ICU Medical Inc./Hospira Infusion Systems
New York-based pharmaceutical giant Pfizer Inc. announced on Oct. 6 the $1 billion cash-and-stock sale of its Hospira Infusion Systems unit to San Clemente, California-based ICU Medical. Reuters reports that Pfizer will receive $600 million in cash and $400 million in newly issued shares of ICU Medical—giving it a large stake in the infection prevention company—as part of the deal, which is expected to close in the first quarter of 2017. Pfizer paid $17 billion in 2015 to acquire former parent company Hospira. In August, Pfizer paid another $14 billion to buy cancer drug maker Medivation Inc.
Legal Advisers: Latham for ICU; Skadden and Ropes & Gray for Pfizer.