A logo sign outside of a facility occupied by the Reckitt Benckiser Group, in Springfield, Missouri. (Photo: Kristoffer Tripplaar/AP)
British consumer products giant Reckitt Benckiser Group plc announced on Feb. 10 its $17.9 billion buy of Glenview, Illinois-based baby formula maker Mead Johnson Nutrition Co., a baby formula maker known for brands like Enfamil.
The deal, the largest in Reckitt’s history and worth some $16.6 billion, excluding debt, is expected to close in the third quarter of this year. The transaction also opens up a new market for Reckitt Benckiser products—such as Durex condoms, Lysol cleaners and Woolite laundry detergent—in Asia.
Mead Johnson, manufacturer of Enfamil nutrition formula for infants and toddlers, is second only to Nestlé SA in that market in Asia. In 2015, the Chinese government abandoned its one-child policy in favor of a universal two-child policy, which took effect a little over a year ago. As a result, China’s birth rate last year rose 7.9 percent, an increase that has led many in the baby nutrition business to see a fast-growing market for food, formula and medicine.
Kirkland & Ellis corporate partner David Holdsworth, who joined the firm’s London office last year from Linklaters, is leading a team from the firm advising Mead Johnson, according to U.K. sibling publication Legal Week. Patrick Sheller serves as general counsel for Mead Johnson, which became independent in 2009 after being spun-off by pharmaceutical giant Bristol-Myers Squibb Co.
Other Kirkland lawyers advising on the deal include corporate partners Willard Boothby, Jonathan Davis, David Fox and Daniel Wolf in New York, where the latter two joined the firm in a high-profile lateral move from Skadden, Arps, Slate, Meagher & Flom in 2009. Kirkland executive compensation partner Scott Price, tax partner Dean Shulman (who joined the firm from Skadden in 2014), capital markets partner Tim Cruickshank, finance partner Neel Sachdev and antitrust partners Ian John and Paula Reidel are also working on the matter.
Cleary Gottlieb Steen & Hamilton corporate partners Ethan Klingsberg and Paul Tiger, as well as securities litigation partner Meredith Kotler, are representing The Goldman Sachs Group Inc. and Morgan Stanley & Co. LLC in their role as financial advisers to Mead Johnson on its proposed sale to Reckitt.
Davis Polk & Wardwell and Linklaters have lined up to represent Reckitt on the transaction, according to Legal Week, which last year noted the company’s hire of BP plc’s legal chief Rupert Bondy to serve as its new general counsel. Davis Polk previously acted as special U.S. tax counsel to the company on the de-merger of its specialty pharmaceuticals business, Indivior plc, in 2014.
Davis Polk corporate partners John Amorosi and Harold Birnbaum, executive compensation partner Edmond FitzGerald and tax partner Michael Mollerus are advising Reckitt on its bid for Mead Johnson. Linklaters is handling English banking law matters for Reckitt, which last year appointed senior corporate partner Sarah Wiggins from the Magic Circle firm to serve as its interim general counsel before hiring Bondy.
U.S. Senate lobbying records show that Reckitt paid $70,000 to Holland & Knight last year to advocate for its interests on a range of regulatory and environmental issues.
In other M&A news …
ONEOK Inc. / ONEOK Partners LP
Tulsa-based natural gas processor and storage provider ONEOK announced on Feb. 1 it had agreed to acquire all outstanding units it didn’t already own of ONEOK Partners for $9.3 billion in stock. With the deal, ONEOK becomes a standalone operating company in the hopes of lowering the cost of funding and creating a stable and strong cash flow.
Legal Advisers: Skadden for ONEOK; Andrews Kurth Kenyon for a conflicts committee of ONEOK’s board of directors; Cleary Gottlieb for Barclays plc as financial adviser to ONEOK’s conflicts committee
The Blackstone Group LP / Aon Hewitt LLC
New York-based buyout giant Blackstone announced on Feb. 10 its $4.3 billion all-cash acquisition of Aon Hewitt, the human resources outsourcing business of insurance brokerage and risk management behemoth Aon plc. The latter paid $4.9 billion in 2010 to buy Hewitt Associates Inc., which under Aon’s umbrella emerged as the largest benefits administration platform in the U.S., providing work benefits to 15 percent of the population and more than 1,400 companies. The sale, set to close in the second quarter of 2017, could yield another $500 million for Aon based on future performance of the unit.
Legal Advisers: Kirkland for Blackstone; Sidley Austin for Aon
Royal Dutch Shell plc / Chrysaor Holdings Ltd.
Royal Dutch Shell announced on Jan. 31 an agreement to sell $3.8 billion in North Sea oil and gas assets to British investment firm Chrysaor, as the Amsterdam-based energy giant seeks to shed debt after its $54 billion buy of BG Group plc. The deal, expected to close in the second half of this year, would make Chrysaor the largest independent operator in the North Sea. (Chrysaor is backed by EIG Global Energy Partners entity Harbour Energy Ltd.) Shell also announced on Jan. 31 its $900 million sale of a stake in Thailand’s Bongkot gas field to the Kuwait Foreign Petroleum Exploration Co.
Legal Advisers: Clifford Chance for Shell; Dechert for Chrysaor; White & Case for Harbour Energy; Watson Farley & Williams for third-party lender banks
Parsley Energy Inc. / Double Eagle Energy Permian LLC
In its second deal in less than a month, Midland, Texas-based Parsley Energy announced on Feb. 7 its plans to buy assets in the Permian Basin, as well as other undeveloped land, from Double Eagle Energy in a $2.8 billion cash-and-stock deal. Double Eagle Energy, formed last year via a merger between companies founded by a retired National Football League player and his high school buddy, will unload 71,000 acres to expand Parsley Energy’s holdings in the Permian, giving the acquirer roughly 227,000 acres of oil-rich land in West Texas.
Legal Advisers: Bracewell for Parsley Energy; Vinson & Elkins for Double Eagle Energy
Stone Canyon Industries LLC / Mauser Group NV
On Feb. 7, private equity firm Clayton, Dubilier & Rice agreed to sell its Netherlands-based rigid packaging manufacturer, Mauser Group, to Santa Monica, California-based Stone Canyon for $2.3 billion in cash. The deal came just one day ahead of a planned initial public offering by Mauser Group that securities filings said would generate $3.5 million in legal fees and expenses. Stone Canyon, through its subsidiary BWAY Corp., which it bought last year for $2.4 billion, will become the leading North American manufacturer of rigid metal and plastic containers.
Legal Advisers: Gibson, Dunn & Crutcher for Stone Canyon; Latham & Watkins; Debevoise & Plimpton and Stibbe for CDR
Keysight Technologies Inc. / Ixia
Santa Rosa, California-based electronic measurement company Keysight agreed on Jan. 30 to acquire Calabasas, California-based software provider Ixia in a $1.6 billion all-cash deal. The transaction, expected to close by the end of October, will allow Keysight to expand its software-centric business and give the acquirer access to network equipment manufacturers in Asia.
Legal Advisers: Cleary Gottlieb for Keysight; Bryan Cave for Ixia
United Luck Group Holdings Ltd. / Outfit7 Investments Ltd.
United Luck, a consortium of Asian investors, agreed to Jan. 20 to pay $1 billion to buy Outfit7 Investments, a London-based entertainment company and developer of mobile applications like “Talking Tom” and “Talking Angela.” United Luck beat out China’s Zhejiang Jinke Entertainment Culture Co., which was also bidding for Outfit7.
Legal Advisers: Clifford Chance for United Luck; Taylor Wessing for Outfit7