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KWM Germany plans to double Chinese-German deals capability by mid-2018 in focus shift

Asia-headquartered firm King & Wood Mallesons (KWM) has made a strategic commitment to its German practice with the hire of two new partners in Frankfurt to strengthen its Sino-German deals capability, following the collapse of its European arm in January.

With four corporate partners in Germany, all based in its Frankfurt office, the firm told Legal Business that it plans to grow around 50% in the region by mid-2018.

‘We want to implement our global strategy, and due to the activity in Germany we have decided to enlarge our corporate finance element here,’ said corporate partner Christian Cornett.

According to Cornett, KWM’s German practice is currently engaged in 40% local German work and 60% international transactions work, stemming from the Asia-Pacific region.

‘Germany currently has the strongest economy in Europe, so our international network naturally has a strong focus on Germany now,’ he added.

Corporate partners Hui Zhao and Daniel Ehret will join the firm on 1 October bringing additional corporate finance expertise including clients involved in Sino-German investments.

Cornett said that the firm had approached ‘a few select people’ to join the German practice, with Zhao and Ehret as the first to join, with two or three more due to come on board by the end of the year.

Based in Frankfurt, Zhao joins from Noerr and is a corporate lawyer specialising in Chinese M&A in Germany and worked to develop Noerr’s China practice over the last decade. Ehret is a finance and restructuring specialist who joined from Latham & Watkins. He has represented investors, lenders and distressed companies on restructurings.

‘The strategy is to build two strong pillars in this practice – one international platform servicing work from our Asia Pacific network, and the other to have a strong local German practice. With additional private equity (PE) capability we can now build these,’ Frankfurt Corporate partner Sandra Link said.

‘Outbound investment of Chinese investors has increased in general based on various factors including scarcity of attractive domestic assets in China and a supportive financing and political environment,’ she added.

‘Chinese investors are in particular interested in technology and industrial know-how and “Made in Germany” has a high reputation,’ Link said.

Link cited an rise in Chinese M&A transactions in Germany over the past five years, counting 39 in 2015 and 68 in 2016.

In 2016, in KWM Germany’s mandates included advising Techcent Entrepreneur Family Deng on its joint venture with ALBA Group, and Chinese fertilizer company Kingenta Ecological Engineering Group on its acquisition of Compo Consumer Business from PE investor Triton.

After the firm’s European practice broke down over the last year, EUME senior partner Michael Cziesla, based in Frankfurt, joined McDermott Will & Emery earlier this year. Cziesla had only been elected senior partner of the firm in October last year.

In January, DLA Piper also recruited KWM Germany real estate head Lars Reubekeul and real estate partner Florian Biesalski, along with their teams, to DLA’s Frankfurt and Munich offices.

When Reed Smith confirmed the hire of 50 KWM lawyers across Europe, adding 10% to its European headcount, it also hired two partners in Germany. These were competition and antitrust partner Tilman Siebert in Munich and litigation partner Francis Bellen in Frankfurt.