With large deals in the oil and gas sector still often struggling to get away, RWE’s €5.1bn sale of its upstream oil and gas business RWE Dea to Russian billionaires Mikhail Fridman and German Khan has gifted Slaughter and May, Hengeler Mueller and Linklaters with major corporate mandates, as the deal is already touted to be one of the most significant of the year.
The acquisition from RWE – one of Europe’s big five energy companies – was made by the LetterOne Group, an investment vehicle set up by Fridman and Khan in 2013.
Slaughters and Hengeler put a team together to advise RWE, led by Slaughters oil and gas partner Hywel Davies and corporate partners Matthias Hentzen and Thomas Meurer at Hengeler.
Linklaters advised LetterOne Group, with a team from Dusseldorf led by corporate partners Ralph Wollburg and Tim Johannsen-Roth.
Davies told Legal Business: ‘We’ve seen quite a lot of people looking at decent size deals, the problem is pulling them off. There’s an appetite for large deals, but in the oil and gas sector deal activity in 2013 was significantly down. On the commodities side it’s tended to be portfolio management and shuffling [of assets].’
According to EY, while the oil and gas sector remained one of the most active and resilient global sectors for M&A, the total value of reported oil and gas transactions in 2013 was $337bn, down by 21% on a record high of $423bn posted in 2012. The number of deals – both reported and unreported – was down from 1,800 in 2012 to just under 1,400.
However, there was an increase in ‘megadeals’ in 2013: four with a reported value of over $10bn, compared with three in 2012.
RWE is a longstanding client of both Slaughter and May and Linklaters. In 2006, Slaughters advised RWE on its sale of Thames Water Holdings to Kemble Water for £4.8bn, while Linklaters advised renewable division RWE Innogy on its £400m refinancing of its windfarm portfolio, Zephyr Investments in 2004. Hengeler Mueller also has a history with the energy giant, advising RWE Deutschland on the restructuring of its grid business last year.