Legal Business Blogs

Slaughters and HSF lead as BHP Billiton undergoes major demerger

Slaughter and May corporate partners Richard de Carle and Susannah Macknay are spearheading a demerger at mining giant BHP Billiton, which is spinning off its less profitable aluminium, silver, South African coal, manganese and nickel businesses into a new company estimated to be worth around $14bn.

The new independent company will be created by way of a demerger through an in-specie distribution and listed on the Australian Securities Exchange and Johannesburg Stock Exchange. Slaughter and May is working alongside Herbert Smith Freehills, who are advising on Australian law matters, and 600-lawyer ENSafrica on South African law matters. The new company will be based in Perth.

Slaughters’ team includes tax partner Jeanette Zaman, financing partner Philip Snell and competition partner Michael Rowe. Associates Louise Campbell, Elizabeth Szanto and Emma Game are assisting. HSF’s Australian legal team was made up of corporate partners Al Donald, Quentin Digby, Adam Strauss and Baden Furphy.

BHP Billiton, which is listed on the London Stock Exchange, is a longtime client of the Magic Circle firm. Corporate partner Nigel Boardman, who has been a partner at Slaughter and May since 1982, is the relationship manager and was lead partner on the company’s 18-month pursuit of Rio Tinto for $68 billion in 2008.

The company hopes to create better returns for BHP Billiton shareholders by streamlining the company and focusing on a simpler portfolio comprising iron ore, copper, coal and petroleum. BHP chief executive, Andrew Mackenzie, said in a statement: ‘The assets that would form the new company are not of the same size as those in our major basins but many are among the largest and highest quality in their sectors. We believe they will be more valuable in a purpose-built, independent company than they would be in BHP Billiton.’