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Milbank, Gibson, Davis Polk Counsel Merger of Consultancies In a rare public-private merger of equals, Towers, Perrin, Foster & Crosby struck a deal to join forces with rival Watson Wyatt Worldwide to create what is believed to be the largest employee benefits company in the world, according to news reports. The companies valued the all-stock transaction at $3.5 billion, based on the valuation of both entities. Milbank, Tweed, Hadley & McCoy, represented Towers, led by corporate partner Charles J. Conroy. The deal involved unique challenges, Mr. Conroy told AmLaw Daily, because it is rare for such a large public and private company to merge. Towers, a private human resources consultancy based in Stamford, Conn., comes to the table with 750 private shareholders, each of whom, due to their position and experience, is entitled to a specific level of stock in the new company. The two sides also negotiated an agreement to set aside $200 million for Towers employees who may retire shortly after the deal is completed. That, too, is unusual, Mr. Conroy said. The two companies expect to lay off employees and streamline operations once the merger is complete. The combined company will have annual sales of about $3.2 billion, with 14,000 employees. Dub-bed Towers Watson & Co., it will be publicly list-ed, as is Arlington, Va.-based Watson Wyatt. According to The Wall Street Journal, the merger reflects pressure on revenues in the consultancy industry as client companies lay off staff and trim discretionary projects. Other Milbank partners who participated in the deal were Roland Hlawaty, corporate; Alan J. Stone, litigation; Russell J. Kestenbaum, tax; Paul J. Wessel, executive compensation and employee benefits, and Arnold B. Peinado, III, securities. Associates were Brian P. Kelly, Gus Cheliotis, David S. Schwartz, Alison S. Fraser, Elad Roisman, George A. Esposito Jr., Peter Heller, Matthew Thiel and John Timmermann, all corporate, and Stacey A. Mesler, tax. Of-counsel Charles W. Westland, competition, also provided advice. Gibson, Dunn & Crutcher advised Watson Wyatt on the deal with a team led by Washington, D.C.-based corporate partner Stephen Glover and including partners Brian Lane and Ronald Mueller in Washington and James Moloney in Orange County, Calif., securities; Washington-based Stephanie Tsacoumis, corporate; Washington-based Arthur Pasternak, tax; Dallas-based Sean Royall and Washington-based Josh Lipton, antitrust; Los Angeles-based Linda Curtis, finance, and Washington-based Michael Collins, benefits. Participating associates were Benjamin Rippeon, tax, and Adam Di Vincenzo, antitrust, both in Washington, and Los Angeles-based Andrew Cheng, finance. Davis Polk & Wardwell is advising Banc of America Merrill Lynch Securities, financial advisers to the deal. Its team includes partners Leonard Kreynin and Marc O. Williams, associate Alexander N. Macleod and summer associate Isaly S. Judd. Cleary, Skadden Advise Nortel Deal Nortel, the bankrupt Canadian phone-equipment maker that once had a market valuation of $250 billion has agreed to sell its most lucrative asset to Nokia Siemens for $650 million by the third quarter of this year. Nortel, once Canada’s largest company by market value, is selling off its wireless assets in an attempt to make a dent in the $3.6 billion in bonds it owes creditors, a debt that forced the Ottawa-based company to file for bankruptcy in January. Its profits have waned since the tech bubble burst in 2000, compounded by heightened competition in recent years from Cisco Systems and Juniper Networks. DealBook reports that Nortel posted losses of about $7 billion over a two-year span. A team from Cleary Gottlieb Steen & Hamilton handled the matter for Nortel, led by bankruptcy partner James Bromley and including partners Lisa Schweitzer, bankruptcy; Paul Shim, Daniel Sternberg and Donald Stern, mergers and acquisitions; Craig Brod, securities; Len Jacoby, intellectual property; Steven Horowitz, real estate, and Arthur Kohn, employee benefits. The AmLaw Daily reported that Derrick Tay of Ogilvy Renault is serving as Nortel’s Canadian counsel. Skadden, Arps, Slate, Meagher & Flom counseled Nokia on the deal, led by partners Lynn Hiestand, Michal Berkner, and Scott Simpson, all resident in the firm’s London office. Sharon Geraghty, an M&A partner at Toronto-based Torys, also advised Nokia on the matter as local Canadian counsel. AIG Announces More Deals Weil, Gotshal & Manges and Debevoise & Plimpton, advised AIG in structuring a complicated transaction with the Federal ReserveBank of New York that is de-signed to cut the insurer’s debt to the central bank by about $25 billion. The insurer is preparing its two largest overseas insurance businesses for initial public offerings, and it has agreed to hand over equity stakes in both units to the New York Fed. The Fed will get a $16 billion stake in American International Assurance Co. (AIA), which operates mostly in Asia, and a $9 billion stake in American Life Insurance Co. (known as Alico), which operates in more than 50 countries around the world, according to Bloomberg. Weil partners on the deal were Michael Aiello, Matthew Gilroy, Michael Weisser, corporate; Mark Hoenig and Joseph Newberg, tax, and Marcia Goldstein, business finance and restructuring. Associates were Caroline Tait, Yossie Horwitz, Ronald Victor, Jennifer Cheng, Eoghan Keenan, Amie Tang and Kim Shah, corporate; and Chayim Neubort and Hagai Zaifman, tax. Debevoise partners John Vasily and Edward Drew Dutton led the firm’s team. This is at least the third AIG asset selloff for Debevoise since the insurer took on about $180 billion in government bailout aid. The firm has previously advised on the sales of AIG’s asset management unit to a consortium of private equity groups and AIG’s Canadian life insurance unit to the Bank of Montreal, according to our previous reporting. Davis Polk & Wardwell reprised its role as the New York Fed’s main adviser. The law firm was at the center of the global economic collapse as the Fed’s lead adviser in several bailout deals, including AIG’s original bailout. Partners John Amorosi and John Knight led the firm’s team on the latest deal. Meanwhile, the ailing insurer unloaded its Mexican consumer finance unit to local buyers for an undisclosed sum, according to The Wall Street Journal. The buyers are Desarrollo de Negocios Integrados SA and Inversiones DNI SA, two companies related to the larger groups Afirme Group Financiero and Consorcio Villacero, according to The New York Times. Kramer Levin Naftalis & Frankel advised AIG on the deal, led by partner Howard Spilko. Mr. Spilko said he has been advising AIG on deal work for about a dozen years, a relationship that began because of his connections to one AIG in-house lawyer and has grown from there, he told The American Lawyer. Also working on the deal from Kramer Levin were associates Adam Karasik, Joshua Little and Andrew Ward, all corporate; and Blake Rigel, tax; counsel Kevin M. Moss, intellectual property, and special counsel Avram Cahn, employee benefits. Fulbright & Jaworski represented the Mexican buyers along with local counsel, Mr. Spilko said. Houston-based Fulbright partner Laura McMahon led the firm’s team on the deal. @

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