Praxair plant. (Credit: WinterE229 via Wikimedia Commons)
Four big firms closed out 2016 by scoring roles on the second-largest M&A deal of the year.
Danbury, Connecticut-based Praxair Inc. announced on Dec. 20 its $35.2 billion bid to acquire Germany’s Linde AG. The two companies, rival providers of industrial gas products, resumed tie-up talks in early December, three months after Linde called off merger discussions.
Praxair and Linde have reportedly discussed divestitures to allay potential antitrust concerns stemming from the creation of the world’s largest supplier of industrial gases. The so-called merger of equals will see the combined company be called Linde. Shareholders in Linde and Praxair will each hold 50 percent of the stock in the new company, which will be dual-listed in New York and Frankfurt and valued at some $67 billion.
Sullivan & Cromwell, which advised Germany’s Bayer AG on its $66 billion buy of Monsanto Co., has taken the lead counseling Praxair with a corporate team led by New York-based partners Keith Pagnani and Krisha Veeraraghavan and partner Carsten Berrar in Frankfurt. Sibling publication Corporate Counsel reported in late 2014 on Guillermo Bichara being tapped to succeed the retiring Jim Breedlove as Praxair’s general counsel and corporate secretary.
Lawyers from Cravath, Swaine & Moore, Linklaters and leading independent German firm Hengeler Mueller are representing Linde on the deal, according to German legal publication Juve. Richard Hall, Cravath’s head of M&A for Europe and the Middle East, is working on the deal with corporate partner Aaron Gruber and tax partner Leonard Teti II.
Linklaters antitrust partner Thomas McGrath in New York and Bernd Meyring in Brussels—where he was named national managing partner for Belgium in October—are handling regulatory matters for Linde, while Hengeler Mueller corporate partner Maximilian Schiessl is also advising the Munich-based company. Christoph Hammerl serves as Linde’s general counsel.
The past year has not been kind to the industrial gas sector. Many have been forced to consolidate amid a continuing decline in global energy prices, as well as slow growth in some key markets.
In other M&A news …
Fairfax Financial Holdings Inc. / Allied World Assurance Co. Holdings Ltd.
Toronto-based insurance and investment group Fairfax Financial announced on Dec. 19 a $4.9 billion cash-and-stock deal to snag Swiss insurer Allied World Assurance. Expected to close in the second quarter of 2017, the proposed acquisition is Fairfax chairman and CEO Prem Watsa’s largest purchase to date.
Legal Advisers: Shearman & Sterling, Torys and Homburger for Fairfax Financial; Willkie Farr & Gallagher, Baker & McKenzie and Walder Wyss for Allied World; Cleary Gottlieb Steen & Hamilton for Bank of America Corp.’s Merrill Lynch as financial adviser to Allied World
SMBC Rail Services LLC / American Railcar Leasing LLC
Icahn Enterprises, an investment firm owned by billionaire investor Carl Icahn, also announced on Dec. 19 its agreement to sell St. Charles, Illinois-based American Railcar Leasing to SMBC Rail Services, a unit of Japan’s Sumitomo Mitsui Banking Corp, in a deal worth up to $3.36 billion. The transaction, set to close in the second quarter of next year, includes the sale of about 29,000 railcars, as well as an option to purchase an additional 4,800 more.
Legal Advisers: Skadden, Arps, Slate, Meagher & Flom and Chapman and Cutler for SMBC Rail Services; Thompson Hine for American Railcar
Star Energy Consortium / Chevron Corp.
San Ramon, California-based energy giant Chevron announced on Dec. 23 its plans to offload geothermal assets valued at $3 billion in Indonesia and the Philippines to the Star Energy consortium. The transaction, the terms of which were undisclosed, comes amid ongoing weakness in global oil prices. Members of the buyers’ group include AC Energy Holdings Inc., a wholly owned subsidiary of Philippine conglomerate Ayala Corp.
Legal Advisers: Clifford Chance for Star Energy
Allergan plc / LifeCell Corp.
Allergan, best known for its Botox product, announced on Dec. 20 its $2.9 billion cash buy of LifeCell, a regenerative medicine unit owned by privately held medical device company Acelity LP. The deal, set to close in the first half of 2017, is Allergan’s first step into regenerative medicine, which the Dublin-based pharmaceutical giant plans on using within its plastic surgery space.
Legal Advisers: Debevoise & Plimpton for Allergan; Simpson Thacher & Bartlett for LifeCell
Onex Corp. / Parkdean Holidays Ltd.
On Dec. 17, Toronto-based private equity firm Onex announced its $1.68 billion buy of British caravan holiday park operator Parkdean Resorts from London-based buyout firm Epiris—formerly known as Electra Partners—and the Polygon Recovery Fund. Parkdean operates 73 caravan holiday parks across England, Scotland and Wales. The deal, set to close in the first quarter of 2017, comes after plans for an initial public offering by Parkdean on the London Stock Exchange were shelved in October.
Legal Advisers: Latham & Watkins for Onex; Clifford Chance for Epiris; King & Spalding for Polygon; Macfarlanes for Parkdean
Brookfield Infrastructure Partners LP / Reliance Communications Ltd.
Indian telecommunications carrier Reliance confirmed on Dec. 21 the details of a $1.6 billion cash deal that will see it see a 51 percent stake in its mobile phone tower business to Canada’s Brookfield Infrastructure. The transaction, the latest by one of India’s highly-leveraged companies, is the largest-ever investment by an overseas financial investor in the country’s infrastructure sector and the second-largest private equity deal ever on the subcontinent.
Legal Advisers: Herbert Smith Freehills and JSA Law for Reliance; Shardul Amarchand Mangaldas for Brookfield Infrastructure
Anadarko Petroleum Corp. / Alta Marcellus Development LLC
On Dec. 21, The Woodlands, Texas-based Anadarko Petroleum Corp. announced the $1.24 billion sale of its assets in the Marcellus Shale play in north-central Pennsylvania to Alta Marcellus, a subsidiary of Houston-based Alta Resources Development LLC. The deal, expected to close in the first quarter of 2017, marks the exit from the Keystone State of one of the nation’s largest shale gas drillers.
Legal Advisers: Sidley Austin for Anadarko; Kirkland & Ellis for Alta Marcellus
American Industrial Partners LP / Moly-Cop
The liquidators for Australian industrial group Arrium Ltd. are set to close in January on the $1.23 billion divestment of the company’s mining consumables division Moly-Cop to San Francisco-based private equity firm American Industrial Partners. The transaction was first announced on Nov. 3.
Legal Advisers: Gilbert + Tobin for Arrium; Stikeman Elliott for American Industrial Partners