Whole Foods. (Photo: Rick Kopstein/ALM)
Amazon.com Inc. announced Friday its plans to purchase the organic upscale grocery company Whole Foods Market Inc. in a $13.7 billion mega-deal, one that has yielded key roles for four Am Law 100 firms, as noted by sibling publication Texas Lawyer.
Sullivan & Cromwell M&A partners Krishna Veeraraghavan and Eric Krautheimer are leading a team from he firm advising Amazon as the online retail behemoth moves into the grocery business and physical stores. Wachtell, Lipton, Rosen & Katz executive committee co-chair Daniel Neff and M&A partners Trevor Norwitz and Sabastian Niles are heading up Whole Foods’ outside transactional team.
The transaction itself is a first for Wachtell and Sullivan & Cromwell on behalf of Whole Foods and Amazon, respectively. Orrick, Herrington & Sutcliffe and Dechert represented Whole Foods in the grocery store chain’s failed merger attempt with Wild Oats Marketplace in 2009. (Wachtell partner George Conway III, the husband of White House counselor Kellyanne Conway, co-wrote a piece questioning the U.S. Court of Appeals for the D.C. Circuit’s decision in that case.)
For its part, Amazon has turned to a number of Am Law 100 firms for its countless acquisitions. Gibson, Dunn & Crutcher advised e-commerce giant on its $847 million acquisition of shoe and apparel retailer Zappos and its subsequent $775 million purchase in 2012 of Kiva Systems, an inventory robotic system.
Debevoise & Plimpton also picked up work for Amazon on its $500 million acquisition of Quidsi, Inc., an e-commerce company that counted former U.S. Attorney for the Southern District of New York Preet Bharara as an early investor and which operated BeautyBar.com, Diapers.com and Soap.com. Most recently, Cleary Gottlieb Steen & Hamilton advised Amazon CEO Jeff Bezos in his $250 million all-cash purchase of The Washington Post in 2013.
Latham & Watkins corporate partners Adel Aslani-Far and Mark Gerstein are representing Evercore Partners in its role as financial adviser to Whole Foods on its proposed sale to Amazon, while Paul Hastings partner Steve Camahort is counseling The Goldman Sachs Group Inc. in its role as financial adviser to Amazon. (Camahort joined Paul Hastings last year from Shearman & Sterling.)
Weil, Gotshal & Manges banking partners Morgan Bale and Heather Viets, capital markets partner Faiza Rahman, M&A partner Raymond Gietz and tax partner William Horton are advising Bank of America/Merrill Lynch and Goldman Sachs, both of whom are providing bridge financing for the acquisition of the grocery store chain.
The Intercept reported Sunday that conflicts among some officials in the administration of President Donald Trump could require recusals that might expedite regulatory approval for Amazon’s purchase of Whole Foods. Recently retired Latham antitrust partner Abbott “Tad” Lipsky Jr. now serves as acting director of the Federal Trade Commission’s bureau of competition, while former Brownstein Hyatt Farber & Schreck partner Makan Delrahim was tapped earlier this year to lead the U.S. Department of Justice’s antitrust division.
Brownstein Hyatt is one of Amazon’s many registered outside lobbyists. The firm received $80,000 from Amazon in the first quarter of this year to advise on tax, technology, telecommunications and trade issues, according to records on file with the U.S. Senate. Amazon also made another $80,000 payment in the first quarter to Akin Gump Strauss Hauer & Feld, which is advising the company on Marketplace Fairness Act, Remote Transaction Parity Act and tax issues, and a $100,000 payment to Squire Patton Boggs to handle tax policy issues and matters related to the Remote Transaction Parity Act.
Wilmer Cutler Pickering Hale and Dorr partner Jamie Gorelick— an attorney for President Trump’s son-in-law Jared Kushner, the subject of many high-profile stories this year by Bezos’ Washington Post—serves as an independent member of Amazon’s board of directors, along with former Perkins Coie partner and executive committee member Tom Alberg. David Zapolsky, a former partner at Dorsey & Whitney and now-defunct Bogle & Gates, has served as Amazon’s general counsel since 2012.
In April, Whole Foods hired former Office Depot Inc. executive Heather Stern to serve as its new general counsel and global vice president of legal affairs. Stern replaced Roberta Lang, a longtime in-house legal chief at Whole Foods. Whole Foods has been under pressure this year from activist investor Jana Partners LLC, which stands to make roughly $300 million from a sale of the Austin, Texas-based organic grocer to Amazon.
In other M&A news …
Digital Realty Trust Inc. / DuPont Fabros Technology Inc.
In its latest and largest acquisition, San Francisco-based Digital Realty announced on June 9 a $7.6 billion all-stock deal to buy fellow data center operator DuPont Fabros as the proposed acquirer looks to expand in high-demand markets across the U.S., according to sibling publication GlobeSt. Both companies, which rent out data center space, have benefited from a rapid shift to cloud technology. The deal, which includes $1.6 billion in assumed debt from the target, is expected to close in the second half of this year.
Legal Advisers: Latham for Digital Realty Trust; Hogan Lovells for DuPont Fabros; Shearman & Sterling for Citigroup Inc. on bridge financing
Clayton, Dubilier & Rice Inc. / HD Supply
New York-based buyout firm CDR announced on June 6 its $2.5 billion bid to acquire HD Supply’s waterworks division with the hope that upgrades to the U.S. water supply infrastructure are on the immediate horizon. The St. Louis-based target is the largest distributor of water, sewer, storm and fire protection products in the country with 244 branches in 46 states. The deal is expected to close in HD Supply’s third fiscal quarter.
Legal Advisers: Debevoise & Plimpton for CDR
Polar Bidco SARL / Sponda plc
Looking to expand its real estate business in the Nordic region, Polar Bidco, an entity owned by affiliates of private equity giant The Blackstone Group LP, touted a nearly $2 billion takeover bid on June 5 for Finnish real estate investment firm Sponda. The announcement of the offer came just three days after Blackstone agreed to sell European warehouses and logistics business Logicor to China Investment Corporation for around $13.8 billion.
Legal Advisers: White & Case for Polar Bidco; Castren & Snellman for Sponda
Peak 10 Holding Corp. / ViaWest Inc.
Just three years after purchasing Colorado-based ViaWest, Calgary-based Shaw Communications Inc. agreed on June 13 to sell its data services subsidiary to GI Partners-owned Peak 10 for $1.675 billion, netting the Canadian telecommunications company a $580 million profit in the process. With the proceeds from the sale, Shaw Communications plans on purchasing airwaves to build up its new wireless unit as it looks to bolster its offerings to customers in Western Canada.
Legal Advisers: Paul Hastings for GI Partners; Paul, Weiss, Rifkind, Wharton & Garrison and Dentons for Shaw Communications
Natura Cosméticos S/A / The Body Shop International plc
On June 12, French cosmetics giant L’Oréal announced that it would sell London-based cosmetics and skin care retail chain The Body Shop for $1.1 billion to rival Natura Cosméticos, the largest cosmetics company in Latin America and owner of the Aesop brand, as reported by sibling publication Legal Week. The deal is expected to close later this year.
Legal Advisers: Linklaters and Baker McKenzie for L’Oreal; Davis Polk & Wardwell for Natura Cosméticos