Even for a veteran of big deals like Skadden’s Kenton “Ken” King, these were big deals. King represented Netherlands-based NXP Semiconductors N.V. in its $47 billion acquisition by San Diego-based Qualcomm Inc., one of the five largest M&A deals of last year and the largest ever in the deal-happy semiconductor industry. On top of that, he represented Intel Corp. in its $15.3 billion acquisition of Mobileye N.V., the largest-ever inbound M&A deal in the Israeli market. King told The Recorder about lessons he’s learned by being across the table from some of the best lawyers in Silicon Valley on deals.
What were your professional highlights of the past year? What made that deal or those deals stand out? Our representation of NXP Semiconductors in its acquisition by Qualcomm certainly stands out. This largest-ever deal in the semiconductor sector was an immensely complex global transaction involving a host of regulatory, tax and other challenges across at least 25 countries. This deal also continued the wave we have been riding for several years as the semiconductor sector undergoes consolidation. A few years ago, we handled more than $80 billion in semiconductor deals out of our Palo Alto office alone. We initially met the legal team at NXP across the table, when we represented Freescale Semiconductor in its acquisition by NXP in 2015. It was especially gratifying to be tapped by NXP for the Qualcomm deal, based in great part on the work we did opposite them a few years prior.
Helping Intel acquire the Israel-based Mobileye was another standout deal this year. Mobileye’s unusual corporate status as an Israeli tax resident Dutch entity traded on the U.S. stock market meant we had to develop a pretty novel transaction structure in order to navigate Dutch and Israeli laws and a host of tax considerations. Assisting Intel achieve an important strategic objective by getting into the driverless car business in a very big way was quite gratifying. As Intel’s CEO said when Intel announced the deal, “[A]utomobiles and the automotive industry are increasingly driven by data and computing. The saying ‘What’s under the hood’ will increasingly refer to computing, not horsepower.” This also was the largest-ever inbound deal into Israel and the largest-ever transaction involving an Israeli tech company.
With which clients do you have the longest relationships? How far back do those relationships go? Some of the strongest, most long-lasting relationships we have are with former associates who were with us when we first opened the office in Palo Alto. It’s always given me a great deal of satisfaction and pride when former associates who go in-house turn around and want to hire us. I’m pretty sure it’s not out of revenge. And I know it’s not a favor for having given them an easy time of it while they were here. I think they see the dedication and commitment to client service, how hard we work at achieving client goals, and know that we’ll provide that same intensity of effort and care in everything we do for their important matters where their own reputations are on the line. When that happens, you know you can’t let them down and you respond accordingly.
Why do you think clients come back to you? What can they get from you that they don’t get from someone else? We like to think that we are unmatched in terms of resources, that we have the ability to do the most complex deals, and ultimately can offer some pretty sound legal and business judgment after so many decades in the trenches. Of course, we also are keenly aware that the companies we represent in Silicon Valley and around the world have their pick of the world’s top attorneys. One thing I have been told we do very well—something that might seem relatively simple but perhaps doesn’t always come naturally to all attorneys—is to listen. Complex transactions like these require attending to the needs of myriad groups, and careful listening not only gives everyone a chance to be heard, it provides invaluable insights that help us come to that “aha” moment that often drives a unique legal strategy. Ultimately, it also helps to create stronger relationships, transforming business clients to long-term friends, which makes the work so much more interesting and fun.
What’s more important in the current market and why: offering bespoke services or being efficient? Fees and efficiency are top of mind for our clients, so that’s top of mind for us. While Skadden may not be known for cut-rate fees, our clients repeatedly tell us that our deep resources and our ability to do highly streamlined work set us apart and, ultimately, that they see the value that we bring to the table.
Outside your partners, who is another corporate lawyer you admire and why? As for people I admire, I’d have to mention Bob Gunderson, Brooks Stough and Scott Dettmer, who are, of course, three of the founding partners at Gunderson Dettmer. Bob, Brooks and Scott are legends in the Valley and their firm’s reputation really mirrors theirs: completely brilliant, but in a low-key, unflashy way—consistently providing insightful, actionable and practical advice to their clients.
I’ll never forget a lesson I learned from Scott when I negotiated a deal opposite him early on when we’d first come to Silicon Valley nearly 20 years ago. Scott would take an issue and very straightforwardly say: “Here’s what my client would like. I know you’re going to say X, and then I’ll say Y, but why don’t we just get to a reasonable point and compromise as follows.” By acknowledging the other side’s arguments and concerns, he was really able to take a lot of the emotion out the negotiation and get to a reasonable position for both of us right away. Not usually at a loss for words, I really was left with nothing much to say other than: “Yep. Sounds right. Let’s move on to the next issue.”