Time Warner headquarters in New York City. (Credit: Time Warner Inc.)
AT&T Inc.’s proposed $108.7 billion acquisition of Time Warner Inc. figures to receive a robust regulatory review, one that should be a boon to professional advisers for both companies.
While the mega-deal has a path to approval, overcoming some initial political opposition will fall to teams of lawyers and lobbyists, with AT&T having nearly 100 registered lobbyists on its payroll. James Cicconi, a former Akin Gump Strauss Hauer & Feld partner serving as senior vice president for external and legislative affairs at AT&T, retired from the company in late September. Taking Cicconi’s place is former Mayer Brown litigator Robert Quinn Jr.
Records on file with the U.S. Senate show that Mayer Brown and Akin Gump have both handled lobbying work for AT&T this year. Akin Gump has received $300,000 through the first three quarters of this year to advocate on telecommunications and wireless industry legislation, regulation and policy, including antitrust, arbitration and corporate governance issues. Mayer Brown has been paid $300,000 during that same period to advise on arbitration legislation.
Arnold & Porter, which is serving as regulatory counsel to AT&T on its bid for Time Warner, has been paid $30,000 by the company since being hired in March to advise on “issues related to communications and technology policy.” AT&T also paid $240,000 to Wiley Rein through the first three quarters of this year to handle a host of matters related to cybersecurity, data spectrum, net neutrality and telecommunications legislation.
Sullivan & Cromwell is serving as lead M&A counsel to AT&T, whose general counsel is former Haynes and Boone partner David McAtee II. William Kennard, a former senior partner at DLA Piper predecessor Verner, Liipfert, Bernhard, McPherson & Hand, serves as an independent member of the board of directors at AT&T. Gary Ginsberg, a former Simpson Thacher & Bartlett associate and Clinton administration counsel hired by Time Warner in 2010 as executive vice president of corporate marketing and communications, reportedly had a lunch on Martha’s Vineyard this summer that helped put the wheels in motion for an AT&T deal.
Among Time Warner’s many corporate lobbyists are Capitol Tax Partners and Venable, which have received $150,000 and $30,000, respectively, through the third quarter of this year to advise on a range of different matters, according to Senate records. Time Warner’s general counsel is former Kirkland & Ellis partner Paul Cappuccio, one of the nation’s highest paid in-house legal chiefs, who beat out former Cravath, Swaine & Moore associate Christopher Bogart for the role after AOL Inc.’s 2000 merger with Time Warner. (Bogart became CEO of Time Warner Cable Inc. before going on to start litigation funder Burford Capital LLC.) Cravath, of course, is currently serving as lead counsel to Time Warner on the company’s proposed sale to AT&T.
Another potential combination with a lobbying component is the looming tie-up between daily fantasy sports (DFS) providers DraftKings Inc. and FanDuel Inc., both of whom agreed last week to pay a collective $12 million to settle false advertising suits by New York’s attorney general. Boies, Schiller & Flexner represented DraftKings and Debevoise & Plimpton took the lead for FanDuel on the accord, which has left both startup companies strapped for cash.
ESPN.com reported Friday that mounting legal and lobbying costs for DraftKings and FanDuel had them headed towards a possible union. The American Lawyer reported last year on the array of lawyers and lobbyists hired by both companies to cope with regulatory inquiries related to the controversial DFS business, itself the subject of an in-depth ESPN story in August.
Senate lobbying records show that Morgan, Lewis & Bockius has received $330,000 from Boston-based DraftKings since October 2015 to advocate on “issues related to fantasy sports.” FanDuel, which is based in New York and Edinburgh, Scotland, paid $240,000 to Steptoe & Johnson during that same timeframe to advise on similar matters. Both companies, who have declined to comment about any merger talks, are also employing dozens of lobbyists at the state level. As with AT&T’s bid for Time Warner, any combination will likely receive a thorough regulatory review.
In other M&A news …
Qualcomm Inc. / NXP Semiconductors N.V.
The American Lawyer reported Thursday on mobile phone chipmaker Qualcomm’s $47 billion cash-and-debt acquisition of NXP, a semiconductor deal dubbed the largest of its kind and one that brought a big new client to Paul, Weiss, Rifkind, Wharton & Garrison. As demand for microchips has slowed, the purchase of Eindhoven, Netherlands-based NXP allows San Diego-based Qualcomm to extend its reach beyond smartphones and into supplying chips for cars and payment terminals. The mega-merger is expected to close by the end of 2017.
Legal Advisers: Paul Weiss, Cravath, Swaine & Moore and Allen & Overy for Qualcomm; DLA Piper for Qualcomm’s board of directors; Skadden, Arps, Slate, Meagher & Flom and De Brauw Blackstone Westbroek for NXP; Jones Day for Qatalyst Partners as financial adviser for NXP
Rockwell Collins Inc. / B/E Aerospace Inc.
Cedar Rapids, Iowa-based aviation electronics Rockwell Collins agreed on Oct. 24 to buy B/E Aerospace, the largest equipment supplier for aircraft cabins, in an $8.5 billion cash-and-stock deal that includes the assumption of $1.9 billion in the target’s debt. The purchase of Wellington, Florida-based B/E Aerospace, expected to close in the spring of 2017, makes Rockwell Collins one of the world’s largest aerospace suppliers.
Legal Advisers: Skadden, Arps, Slate, Meagher & Flom, for Rockwell Collins; Shearman & Sterling for B/E Aerospace; Cleary Gottlieb Steen & Hamilton for Citigroup Inc. and The Goldman Sachs Group Inc. as financial advisers to B/E Aerospace
HNA Group (International) Co. Ltd. / Hilton Worldwide Holdings Inc.
Hong Kong-based conglomerate HNA Group announced on Oct. 24 the $6.5 billion acquisition of a 25 percent stake in the Hilton hotel empire from private equity owner The Blackstone Group LP. HNA’s big buy comes as Chinese companies continue building up their investments in hotels around the world in order to capitalize on the outbound Chinese tourist market, according to sibling publication The Asian Lawyer. HNA will become the largest shareholder in McLean, Virginia-based Hilton, while Blackstone will keep a 21 percent stake in the hotel company, which raised $2.35 billion through an initial public offering in 2013.
Legal Advisers: Weil, Gotshal & Manges for HNA; Wilmer Cutler Pickering Hale and Dorr and Morris, Nichols, Arsht & Tunnell for Hilton; Simpson Thacher & Bartlett for Blackstone
TD Ameritrade Holding Corp. / The Toronto-Dominion Bank / Scottrade Inc.
The American Lawyer reported last week on a combination between two of the largest discount brokerages in the U.S. TD Ameritrade and Toronto-Dominion Bank—better known as TD Bank—agreed on Oct. 24 to acquire Scottrade in a $4 billion deal. TD Bank, owner of a 42 percent stake in Omaha-based TD Ameritrade, will pay $1.3 billion in cash to buy Scottrade’s banking business. TD Ameritrade will then pay $2.7 billion to acquire the rest of the St. Louis-based target. The two-part deal, expected to close in the second half of 2017, is the latest in a series of consolidation efforts in the brokerage industry as it copes with increased competition and a decline in stock trading.
Legal Advisers: Wachtell, Lipton, Rosen & Katz for TD Ameritrade; Simpson Thacher for TD Bank; Sullivan & Cromwell for Scottrade; Fried, Frank, Harris, Shriver & Jacobson for Goldman Sachs as financial adviser to Scottrade
China Oceanwide Holdings Group Co. Ltd. / Genworth Financial Inc.
Beijing-based finance and real estate conglomerate China Oceanwide followed the lead of other Asian companies in to the U.S. insurance market by buying Genworth in a $3.8 billion deal. Founded by well-connected Chinese billionaire Lu Zhiqiang, China Oceanwide agreed to pay $2.7 billion in cash and committed another $1.12 to cover the debt of Richmond, Virginia-based Genworth. The deal, announced on Oct. 24, is expected to close mid-2017.
Legal Advisers: Sullivan & Cromwell and Potter Anderson & Corroon for China Oceanwide; Willkie Farr & Gallagher and Weil for Genworth; Richards, Layton & Finger for Genworth’s board; Cleary Gottlieb for Goldman Sachs and Lazard Ltd. as financial advisers to Genworth
American Midstream Partners LP / JP Energy Partners LP
American Midstream, backed by Boston-based private equity firm ArcLight Capital Partners LLC, announced on Oct. 24 plans to purchase Irving, Texas-based JP Energy in a $2 billion all-stock merger. The deal creates a combined midstream infrastructure business headquartered in Houston that includes transportation pipelines, processing plants and an offshore production facility in the Gulf of Mexico, as noted by sibling publication Texas Lawyer. The transaction is expected to close by year’s end or early 2017.
Legal Adviser: Locke Lord and Thompson & Knight for American Midstream; Andrews Kurth for ArcLight; Latham & Watkins for JP Energy
The Hearst Corp. / CAMP Systems International Inc.
Hearst, a New York-based media giant known for its ownership stakes in companies like ESPN, announced on Oct. 26 its expansion into aviation data by acquiring CAMP Systems for an undisclosed sum from private equity firm GTCR LLC. The deal, which increases Hearst’s interests in the transportation sector, is expected to close by year’s end. Reuters reported that the transaction values the target at $2 billion, including debt.
Legal Advisers: Clifford Chance for Hearst; Kirkland for GTCR
Buckeye Partners LP / VTTI B.V.
Houston-based oil storage company Buckeye Partners announced on Oct. 24 its plans to pay $1.15 billion to acquire a 50 percent stake in global marine terminal company VTTI from Dutch energy trading company Vitol Holding B.V. Texas Lawyer reported that Rotterdam-based Vitol and its investment partnership will continue to own the other half of VTTI. The transaction is expected to close in January 2017.
Legal Advisers: Latham for Buckeye; Vinson & Elkins for Vitol