Legal Business

Deal watch: City teams fly on £4.6bn Rolls-Royce pension deal as Kirkland and Goodwin take multi-billion dollar mandates

Deal watch: City teams fly on £4.6bn Rolls-Royce pension deal as Kirkland and Goodwin take multi-billion dollar mandates

Big-ticket deals have been fuelling the market in pensions, private equity and fundraising recently with UK top-10 firms and US rivals alike taking the controls on significant mandates.

Legal & General (L&G) handed a joint mandate to CMS and Eversheds Sutherland to advise on its £4.6bn buy-in to buy-out with the Rolls-Royce UK Pension Fund (RRPF), a deal which is billed as the UK’s largest ever bulk annuity and which saw Linklaters act for the trustees.

The pension risk transfer sees the insurer strike its fourth of the five largest deals of this kind in the UK, with the others being British Airways (£4.4bn), ICI (£3bn) and TRW (£2.5bn).

The Eversheds team advising L&G was led by corporate partner Hugo Laing and pensions partner Mark Latimour, alongside CMS partner Thomas Lockley. The Linklaters team was led by global head of pensions Claire Petheram and derivatives partner Mark Brown. The in-house legal team at L&G included Helena Hawthorn, Camilla Curtis and Hannah Kilshaw.

Laing, who also acted for L&G on its £2.4bn buy-out of the Nortel pension scheme and £1.1bn buy-out of the Vickers pension scheme, is optimistic about the market.

‘Volatility in the market can be a good thing for pension deals as it can favourably impact pricing. Insurers buying pension schemes has really boomed in the last few years and the deal values are getting bigger and bigger. The Rolls-Royce deal has shown how big the deals can get and I suspect there will be more of this size to come’, he told Legal Business.

Petheram told Legal Business that the transaction is part of a ‘huge trend’: ‘There is an awful lot of activity in buy-ins where insurers take responsibility for pension liabilities. There has been increased activity in the longevity swap area and that’s only going to ramp up further as corporates look to manage their pension liabilities proactively.’

She added: ‘Insurers represent a gold-standard covenant and there is a willingness on the side of corporates and trustees to lean into these deals. It represents an acceptable position. Trustees have a laser focus on the interests of their members and they can see that deals like this work.’

She expects to see an increase in the number of large-scale transactions over the next 12 months and more innovation in dealing with pension risks.

Kirlkland & Ellis’ City lawyers have also been busy, with the Chicago-bred juggernaut advising investment adviser and repeat customer GLP on the $18.7bn sale of its US logistics business to Blackstone. The firm the same week advised BC Partners-backed United Group on a €220m deal to acquire mobile operator Tele2 Croatia from Tele2 Group.

The GLP deal was co-led by Kirkland corporate partners Michael Steele in London and Michael Brueck in New York, with the team also including real estate partner Kevin Ehrhart in Los Angeles, investment funds partner Kelly Ryan in Chicago and tax partner Mike Beinus in New York.

Simpson Thacher & Bartlett advised long-standing client Blackstone out of New York with a team led by real estate partner Davis Coen.

The sale includes logistics properties owned across 3 separate GLP US funds and totals 179 million square feet of urban logistics assets, claiming to be the largest ever private real estate transaction in the States.

London corporate partner David D’Souza led the Kirkland team advising United Group, supported by David Higgins, debt finance partner Neel Sachdev, capital markets partner Matthew Merkle, technology & intellectual property transactions partner Jenny Wilson and tax partners Tim Lowe and Jan Hobbs. The team was also supported by local law firms Divjak Topic Bahtijarevic, Karanovic Partners and Setterwalls.

Tele2 was advised by Schoenherr through its offices in Austria and Croatia, having acted for Tele2 on a number of other disposals in the region. D’Souza said the acquisition will enable United Group to widen the services that it provides and its coverage across Europe.

Having crept largely unnoticed up Legal Business’ Global London table this year, Goodwin Procter’s City office has been making waves, announcing two major fundraisings in the same week.

The Boston-bred firm advised Glennmont Partners on the €850m closing of its Clean Energy Fund III to invest in clean energy infrastructure projects in Europe. The Goodwin team was led by London partners Michael Halford, Alexandrine Armstrong-Cerfontaine and Laura Charkin.

Although led out of New York by partners David Watson and James Donohue, Goodwin also advised Advent International on its $17.5bn fundraise for its ninth global private equity fund GPE IX Limited Partnership.

The fund surpassed its $16bn target after six months in the market while Advent’s previous global fund, GPE VIII, closed on $13bn 2016.Halford and Charkin also advised on the deal out of London.

Halford told Legal Business the Glennmont transaction was a sign of increased interest in renewable energy investments as indicated by the fund’s diversification of investors into the US and Asia. ‘The market is very active and this is a great time to be raising funds. We are expecting more funds activity over the summer.’

Watson said that Goodwin has acted for Advent since its formation in 1984 and has personally advised the private equity house since 1988. He notes an uptick of interest in the ventures space and a migration from its traditional heartlands of California and Boston over to New York.

Legal Business

Eversheds eyes larger California presence following long-awaited Chicago opening

Eversheds eyes larger California presence following long-awaited Chicago opening

Eversheds Sutherland is opening an office in the ‘very competitive’ Chicago market with the hire of two partners, and has plans to bulk out in California, too.

The firm announced today (29 May) it was opening its first new US office since the 2017 tie-up of Eversheds and US outfit Sutherland Asbill & Brennan. Chicago is the firm’s seventh US office, joining Atlanta, Austin, Houston, New York, Sacramento and Washington DC.

Real estate partners Marc Benjamin and Susan Kai join Eversheds in June from White & Case and Kirkland & Ellis respectively. Benjamin, who will head the Chicago office, only joined White & Case in October, 2018, as part of a six-partner move from Pircher, Nichols & Meeks, while Kai was made up to partner at Kirkland just eight months ago. The pair will be joined by Eversheds litigation partner Robert Owen, who is relocating from New York.

The Chicago office will initially focus on real estate, M&A and litigation, targeting the diversified industrials, technology, media and telecommunications, financial institutions and energy sectors. Co-chief executive Mark Wasserman says the office will be a focal point for both Midwest-based clients and clients engaged in activities there, of which the firm has more than 100.

He told Legal Business the firm had been looking at opening in Chicago for many years but the merger had brought that back into focus. He commented: ‘Post the combination with Eversheds we’ve had two great years, but we were thinking, what is the next thing we need to do to strengthen in the US? That brought us back to Chicago.’

The firm had no set targets for headcount at the office, although Wasserman said they would look to add lawyers in corporate, tax, real estate and litigation. The New York office had grown to about 60 lawyers in the last decade or so – with some more hires due to be announced this week – without ever having a specific goal for its size, and Wasserman was confident the firm would be able to attract talent.

‘It’s a very, very competitive market,’ he told Legal Business. ’Next to New York, you could argue it is the most competitive.’

Having a larger presence in California, where the firm has an office in Sacramento, is the next target. Wasserman said that could include San Francisco, San Diego or Los Angeles, which he argued would be a good fit for the firm’s Asian and European practices as well.

‘We think we should be large in California as well. That’s the next logical place for us.’

Earlier this week, the firm also hired Sarah Paul as a litigation partner to its New York office. Paul was most recently an assistant United States attorney for the Southern District of New York in the Criminal Division, investigating and prosecuting financial crimes.

Eversheds’ global revenue for 2018 rose 10% to $1.175bn. For the 2017/18 financial year, the firm’s International LLP accounts for the non-US business showed revenue increasing 14% to £496m, with the UK playing a prominent role following a 14% turnover hike to generate £396m.

Legal Business

Eversheds’ City partner promotions dip in bolstered global round as Fieldfisher makes up most ever

Eversheds’ City partner promotions dip in bolstered global round as Fieldfisher makes up most ever

Eversheds Sutherland’s international business has made 27 partner promotions, up seven on a flat 2018 round, but with just three promotions in London.

Fieldfisher, meanwhile, has made up 17 partners this year in its largest ever promotions round.

A third of Eversheds’ promotions are female, with the firm aiming for 30% female representation at partner level by 2021. In the UK the firm made up 16 partners, up from nine last year, across Leeds, Birmingham, Belfast, Manchester, Cambridge, Nottingham, and London.

Three were minted in the City, which was down one on the four made up last year. The 11 promoted outside the UK are in Dublin, Durban, Luxembourg, Baghdad, Rome, Dubai and Munich.

There were nine promotions in company commercial, eight in litigation and disputes, six in real estate and four in human resources. The round is up on last year’s 20 promotions, in what was a flat year. In December, Eversheds Sutherland US made up six to partner, down on last year’s 17.

Chief executive Lee Ranson (pictured) commented on the round, which also included 17 legal director promotions: ‘The Eversheds Sutherland promotion process is challenging and designed to ensure that only the very best candidates succeed. On behalf of the firm, I would therefore like to congratulate all of the successful candidates on this significant achievement.’

Elsewhere, Fieldfisher had another record promotions round, making up 14 across London, Birmingham, Manchester, Brussels, Munich and Silicon Valley. The promotions were up on last year’s ten, and included five in London as well as 50% female representation. The practice areas covered were IP, technology, personal injury, corporate, employment, construction, finance, regulatory and dispute resolution.

Managing partner Michael Chissick commented: ‘I am proud that we have achieved such a high level of promotions this year – a record for the firm, both in terms of the number of new partners and the number of offices involved.’

The full list of Eversheds partner promotions:

Colin Askew, tax, Leeds
Enda Cullivan, corporate, Dublin
Andrew Davidson, commercial, Durban
Alexandre Huebscher, financial services, Luxembourg
Mozahem Khalaf, corporate, Baghdad
Massimo Maioletti, GDPR, Rome
Hani Nassef, corporate, Dubai
Jenna Poulton, restructuring, Birmingham
Lara Wills, commercial, Durban
Lisa Bryson, employment, Belfast
Simon Daniel, pensions, Manchester
Louise Lightfoot, employment, Leeds
Manuela Rauch, employment, Munich
Mark Cooper, FSDI, London
Tom Douglas, (real estate litigation and construction) RELCON, Cambridge
Mariangela di Giandomenico, administrative law, Rome
Richard Hartigan, RELCON, Birmingham
Louise Howarth, CDR, Nottingham
Nick Pinder, RELCON, London
Jane Southworth, environment H&S, Manchester
Salam Zuhair, CDR, Baghdad
Balraj Birdi, core real estate, London
Peter Bowen, operations director, Leeds
Elizabeth Cartwright, core real estate, Manchester
Ben Newton, core real estate, Birmingham
Philipp Turnwald, core real estate, Munich
Daniel Walsh, core real estate, Birmingham

The full list of Fieldfisher partner promotions:

Amy Reynolds, IP and technology, protection and enforcement, London
Dushal Mehta, personal injury, London
Edward Westhead, corporate, London
Fabian Reissinger, employment, Munich
Felicity Fisher, privacy, security and information, Silicon Valley
Helen Andrews, construction, Birmingham
James Corlett, brand development, franchising, advertising and commercial, Manchester
Katharina Weimer, technology, outsourcing and privacy, Munich
Marsili Hale, finance, London
Nick Phillips, real estate, Birmingham
Olivia Woolston Morgan, technology, outsourcing and privacy, London
Peter Sellar, regulatory, Brussels
Stephen May, dispute resolution, Birmingham
Tracey Wright, dispute resolution, London

Legal Business

Deal watch: Big cheeses land £975m Dairy Crest deal as Slaughters acts on £1.3bn Provident hostile takeover

Deal watch: Big cheeses land £975m Dairy Crest deal as Slaughters acts on £1.3bn Provident hostile takeover

The UK buyout market had an uncharacteristically frenetic week with City M&A counsel taking the lead on a £1.3bn unsolicited bid for doorstep lender Provident Financial and the £975m recommended offer for UK cheese and spreads stalwart Dairy Crest Group on the same day.

The hostile bid for sub-prime lender Provident was launched at 7am this morning (22 February) by Non-Standard Finance (NSF), with Slaughter and May corporate head Andy Ryde and fellow partner Paul Mudie leading the charge.

NSF was set up in 2015 by former Provident chairman John van Kuffeler, who had previously enlisted Slaughters while at Provident and carried on the relationship at NSF, including on its IPO.

In a rare case of a hostile takeover not leaking beforehand, the target company called up to enlist Clifford Chance on Friday morning when the bid went public. Corporate partners Lee Coney and Mark Poulton are leading the team advising Provident, with the latter having previously advised the client on its strategic review and £331m rights issue.

Shareholders who collectively own more than 50% of the company, including Woodford Investment Management, Invesco and Marathon Asset Management, are understood to be in favour of the offer, given disgruntlement with chief executive Malcolm Le May following a series of profit warnings.

The bid turned hostile after Provident last year rebuffed an approach from NSF. Given heavy regulation of subprime lenders, mainstream banks are unlikely to put in a rival offer for Provident, although the company could be a private equity play.

NSF is planning to demerge its home credit business, Loans at Home, to satisfy the competition authority.

Also benefiting from a long-standing relationship was Eversheds Sutherland  partner Aleen Gulvanessian, who led a team advising Dairy Crest on its £975m sale to Canadian dairy company Saputo.

Dairy Crest is the manufacturer of products including Cathedral City cheddar, Country Life butter – a favourite of former Sex Pistols frontman John Lydon – and Clover spread.

Freshfields Bruckhaus Deringer, led by energy and natural resources head Laurie McFadden and corporate partner Stephen Hewes, advised the buyer. An Ashurst team led by partner Karen Davies advised Lazard as buy-side financial adviser.

The Canadian counterpart is using the acquisition, its first foray into Europe, as a foundation for growth in the UK.

Eversheds Sutherland has advised longstanding client Dairy Crest on a string of deals, including its €430m sale of French cheese spread company St Hubert to Montagu Private equity in 2012, the £80m sale of its dairies business to Müller in 2015 and a recent £70m fundraising.

Gulvanessian told Legal Business that the quality of the buyer was an important consideration in the sale process. ‘It is an excellent brand and business. The directors were keen to ensure that not only was the offer good for shareholders but also for all other stakeholders – the farmers, other suppliers, customers and of course employees.’

Elsewhere, Travers Smith leveraged its long-standing relationship with Ancala Partners to advise its joint venture – Leep Utilities – on the acquisition of SSE Water Limited from SSE plc.

Leep Utilities is a joint-venture of Ancala, the mid-market infrastructure investment manager, and the real estate and infrastructure investor the Peel Group. Long-time relationship partner Spencer Summerfield advised the buyer.

SSE Water is the largest new appointments and variations (NAV) company operating in the UK water sector, owning water networks that supply around 20,000 customers across 28 sites in southern England and Wales.

Legal Business

In-house: Eversheds brokers Dyson sole adviser deal alongside fresh FSCS appointment

In-house: Eversheds brokers Dyson sole adviser deal alongside fresh FSCS appointment

Eversheds Sutherland has added to its suite of sole adviser relationships with a deal for Dyson’s global privacy mandate.

Eversheds has been a leader on sole adviser mandates since its first in 2006 with Tyco, a relationship which continued after the security provider merged with industrial company Johnson Controls in 2016. The firm’s sole adviser role for Dyson’s global privacy work will run for a three-year term.

The Eversheds team was led by partner Liz Fitzsimmons, pitching for Dyson’s privacy work across 82 jurisdictions. Supporting partners include Paula Barrett, Ros Kellaway, James Hyde, as well as the firm’s global privacy team, particularly in Shanghai, led by partner Jack Cai.

Eversheds executive partner Ian Gray told Legal Business Dyson was attracted to the firm’s global reach across 34 jurisdictions in Africa, Asia, Europe the Middle East and US, as well as a network of more than 200 related firms.

Gray commented: ‘Most large corporations, particularly those working across several jurisdictions, are going the same way in that they are all looking at efficiency. Efficiency includes reducing the number of legal advisers they have got.’

Dyson global legal compliance and ethics director Nicholas Cranfield commented: ‘We were impressed by the quality of their privacy offering as well as its international reach and the team’s deep local knowledge of privacy laws and regulations around the world.’

Eversheds has multiple sole adviser mandates, including with Johnson Controls, Turkish Airlines, the International Air Transport Association and Severn Trent.

‘We seem to be having a reasonably good run at the minute,’ Gray added.

Meanwhile, Eversheds was one of three new firms to be appointed to the FSCS legal panel, alongside Addleshaw Goddard and Clifford Chance (CC).

The FSCS, the UK’s statutory compensation scheme for customers of authorised financial services firms, first created a legal panel in 2015  as it sought a more structured approach to recouping investor losses.

Eight firms were appointed to the panel, which is divided into three lots and runs for three years, with a potential one-year extension. Bevan Brittan, Burges Salmon, Dentons, Burness Paull and Trowers & Hamlins were all reappointed to the panel, while Slaughter and May, Herbert Smith Freehills and King & Wood Mallesons were not reappointed.

Addleshaws, Bevan Brittan, Burges Salmon, Burness Paull, CC, Dentons and Eversheds were appointed to the core legal services lot, worth about £12m, while Addleshaws was appointed to the Scots law lot, and Trowers HR and employment.

FSCS GC James Darbyshire led the review. He commented: ‘Against a backdrop of increasing customer expectation and a changing economic and regulatory landscape, I’m confident we’ve got the right mix of legal partners to help us deliver our strategic priorities in the years ahead.’

Legal Business

LLP accounts: Strong returns for CC leadership with bumper 38% pay rise as Eversheds executives see take home remain static

LLP accounts: Strong returns for CC leadership with bumper 38% pay rise as Eversheds executives see take home remain static

Clifford Chance’s (CC) 13-strong executive leadership team took home £22m in the 2017/18 financial year, according to the firm’s filings with Companies House.

It means the firm’s leaders have seen remuneration swell by 38% since last year, when the group of 13 pocketed £16m.

It also represents a drastic leap given that CC’s executive remuneration only inched upwards in £1m increments between 2014/15 and 2016/17.

The considerable financial package is likely related to CC’s healthy overall performance – the Magic Circle firm added £83m to its top line last year, bringing turnover to £1.623bn. This was accompanied by an above-trend increase in profit per equity partner (PEP), growing 16% to £1.6m.

Despite these highlights, the firm’s pay to its highest-earning member has remained flat on last year at £3m. There was revenue growth in all geographies, with continental Europe seeing a 6% uptick to £538m. The Middle East was up by 10% from £49m to £54m, while the Americas increased 6% to £215m.

Total staff costs rose 2% from £693m to £707m, in spite of a 6% dip in average associate numbers, which fell from 2,262 to 2,135. The average partner headcount was also down, decreasing by 10 to 558.

In contrast there were fewer reasons for Eversheds Sutherland International’s leadership team to be cheerful, as the firm’s LLP accounts revealed a payment package static on last year .

Senior leaders took home £4.8m for the 2017/18 financial year, a 20% decrease on last year’s £6m package. However, there was a reduction in executive committee members from five to four during the last year, meaning senior leaders are still taking £1.2m per head. Although a considerable cut at face value, it is marginally less than 2016/17 when executive remuneration was slashed by 22% .

Eversheds Sutherland’s highest-earning member in the non-US business took home 9% more than last year, an increase from £1.4m to £1.52m. This is in line with a wider boost to average remuneration per member, up 11% from £391,000 to £434,000.

The firm’s overall financial outlook is robust, with global revenue increasing 14% to £496m. The UK business played a key role, with a 14% turnover hike to match as the practice generated £396m.

Eversheds Sutherland’s European practice also performed well in 2017/18 as revenue grew 25% to £64m, however the ‘rest of world’ (again not including the US, which has a separate LLP) saw turnover fall 8% to £36m.

Legal Business

Legal tech focus: Slaughters’ tech ally Luminance makes impact but battle for City elite wages

Legal tech focus: Slaughters’ tech ally Luminance makes impact but battle for City elite wages

Luminance has shot to prominence unlike any other UK legal tech start-up. But Hamish McNicol finds there is still plenty to do to break into the top of the profession

‘We’re changing things to the extent Excel changed the way accounting is done,’ Luminance chief executive Emily Foges proclaims. ‘You can’t imagine doing anything financial without it.’

Legal Business

Deal watch: Slaughters and Kirkland drill into giant $12bn offshore plc merger as Travers and Eversheds maximise L&G’s pensions buy-out

Deal watch: Slaughters and Kirkland drill into giant $12bn offshore plc merger as Travers and Eversheds maximise L&G’s pensions buy-out

Slaughter and May and Kirkland & Ellis have led on the $12bn combination of UK Plc offshore drilling companies Ensco and Rowan Companies as Travers Smith and Eversheds Sutherland wrap up Legal & General’s £2.4bn buyout of Nortel Networks UK Pension Plan.

The drilling merger – an all-stock deal and a court-sanctioned scheme of arrangements – will see the shareholders of Ensco and Rowan own 60.5% and 39.5% respectively of the combined business.

Kirkland & Ellis clinched a significant win in UK plc land in advising Rowan with a team including City partners David Higgins, David Holdsworth and Dipak Bhundia. The deal was led out of Houston by corporate partners Sean Wheeler and Doug Bacon and included Dallas partner Ryan Gorsche and New York-based executive compensation partner Scott Price and tax partners David Wheat, Lane Morgan and Mike Carew.

Latham & Watkins is advising Rowan on antitrust aspects, with a team including corporate partner Michael Egge in Washington, Brussels managing partner Lars Kjolbye, and London partner Jonathan Parker.

Meanwhile, Slaughters is acting for Ensco with a team led by corporate partners Hywel Davies and Christian Boney and including partners William Turtle (competition), Jonathan Fenn (pensions) and Mike Lane (tax).

Elsewhere, a Legal & General deal on Monday (8 October) saw the UK insurer complete a £2.4bn buyout of pensions relating to the now-defunct telecoms equipment provider Nortel.

The buy-out relates to around 15,500 pensioner members and around 7,200 deferred members of the pension scheme, which entered a Pension Protection Fund (PPF) assessment after Nortel went into administration in 2009, pending litigation and insolvency proceedings.

The Travers team advising the trustees was led by Dan Naylor and Susie Daykin and also included partner Peter Hughes. Advising Legal & General was an Eversheds team led by Hugo Laing.

Naylor told Legal Business that the deal represented the biggest ever PPF plus arrangement, in which the pension scheme members receive more options, via a member option exercise, and better benefits than the PPF compensation would have offered. A further transaction is likely to follow as more recoveries are made.

The deal is also the second biggest pension buyout ever, after the £2.5bn transaction with Legal & General relating to pensions of US-headquartered automotive supplier TRW in 2014.

Hughes and Naylor, the latter then an associate, were also part of the team advising the trustees of the TRW Pension Scheme, while Laing, then an associate at Clifford Chance, was part of the team advising Legal & General on that deal.

Another major deal this week saw Kirkland, Latham and Allen & Overy score key roles on the sale of shareholdings in fin-tech company FNZ to Canadian pension fund La Caisse de dépôt et placement du Québec (CDPQ) and private equity investor Generation Investment Management.

The deal sees Kirkland advise the sellers, FNZ and funds advised by HIG Capital and General Atlantic, led by London corporate partners Gavin Gordon, Carl Bradshaw and Tom McCarthy. A Latham team led by Michael Bond advised CDPQ and Jonathan Wood at Weil Gotschal & Manges advised Generation. Karan Dinamani at Allen & Overy advised the CEO of FNZ.

The acquisition is the first investment by CDPQ-Generation, the sustainable equity joint venture launched by CDPQ and Generation.  Kirkland has a nine-year relationship with FNZ, having advised on HIG Capital’s initial investment in 2009, General Atlantic’s investment in 2012 and FNZ’s recently announced deal to acquire European Bank for Financial Services (ebase) from comdirect bank.

Legal Business

Adviser reviews: Lucozade Ribena Suntory completes first post-merger panel

Adviser reviews: Lucozade Ribena Suntory completes first post-merger panel

Eversheds Sutherland has won the role of primary UK and Ireland adviser in Lucozade Ribena Suntory’s (LRS) inaugural legal panel review, with nine other firms also making the cut.

The review was a first for general counsel (GC) Mary Guest since joining the drinks giant from Magic Circle firm Linklaters in June 2017, and it is also the first since LRS was formed after Lucozade and Ribena were acquired by Suntory for £1.35bn in 2013. Eversheds will be top of the list for general matters, with the remaining nine firms offering more specialist advice.

Clifford Chance (CC) is in place to offer M&A counsel, while Addleshaw Goddard will offer support with competition matters. Norton Rose Fulbright is on hand to deal with data protection and Stephenson Harwood will oversee IP and litigation.  McCann FitzGerald and Philip Lee have won spots offering Irish advice and completing the roster was DWF, TLT and Walker Morris.

Guest began the review process in April, starting with an initial shortlist of 23 firms which was whittled down to ten during the tender process. The new panel came into effect on 1 September 2018 and it will run for a two-year period.

Eversheds Sutherland partner Julia Woodward-Carlton, who leads on the LRS relationship, told Legal Business: ‘It was a long and challenging tender process with questions around cultural fit and values. Being awarded the primary adviser role was a particularly good outcome as it showcased our deep sector expertise and ability to maintain a trusted advisor relationship.’

Previously owned by GlaxoSmithKline (GSK), Allen & Overy were on hand to advise as Lucozade was sold to Japanese consumer goods company Suntory in 2013.

Corporate partners Edward Barnett and Andrew Ballheimer took the lead for A&O as the represented GSK. CC, led by corporate finance partner Joel Ziff, advised Suntory on the deal.

In other recent panel reviews, education company Pearson selected 14  firms to inhabit newly-created ‘preferred’ and ‘general’ rosters in July.  Among the chosen firms were Freshfields Bruckhaus Deringer, Herbert Smith Freehills, DWF, Bird & Bird, Pinsent Masons and DLA Piper.

Legal Business

Deal watch: City high-flyers land jumbo £4.4bn BA pension deal as Blackstone’s buying spree continues

Deal watch: City high-flyers land jumbo £4.4bn BA pension deal as Blackstone’s buying spree continues

City heavyweights Allen & Overy (A&O), Clifford Chance (CC) and Eversheds Sutherland have landed key roles on Legal & General’s £4.4bn buy-in of the British Airways pension scheme as advisers cash in on a brace of Blackstone deals.

UK insurer Legal & General is taking on £4.4bn of historic pension liabilities relating to the Airways Pension Scheme (APS) in a bulk annuity designed to reduce risk in the scheme.

A&O and Eversheds are advising the trustees, with A&O’s team led by insurance partner Philip Jarvis and counsel Kate McInerney. For their part, Anthea Whitton and Francois Barker are heading the Eversheds team.

The CC team advising Legal & General is being led by corporate partner Katherine Coates and pensions partner Sarah McAleer.

The deal also covers existing longevity reinsurance contracts of roughly £1.7bn entered into by APS via a captive insurer with Canada Life Reinsurance and PartnerRe, which were incorporated into the buy-in arrangement. Closing of the deal will mean that APS is now 90% hedged against all longevity risk.

‘This deal is very significant in the market and part of a trend of which there are push and pull factors,’ one City partner told Legal Business. ‘On the push side, there are trustees out there looking to de-risk and on the pull, market conditions are making deals like this economically viable transactions.’

APS was established in 1948 and it was closed to new members from 31 March 1984. The scheme had 24,196 members, of whom 1.4% were active members, 3.6% deferred members and 95% pensioners.  At the end of March 2018, APS had assets totalling £7.6bn.

Elsewhere, the blistering private equity market saw A&O win the mandate to advise private equity giant Blackstone on its €1bn acquisition of a majority stake in Baltic bank Luminor. The deal involves funds managed by Blackstone and other institutional investors acquiring a 60% stake in the bank, with Nordic banks Nordea and DNB each retaining a 20% stake.

A&O’s private equity partner Karan Dinamani led on the deal – the Magic Circle firm’s inaugural deal for Blackstone on the buyout side – which builds on a long-standing relationship acting for Blackstone’s lenders on real estate transactions.

Commenting on the frothy PE market, Dinamani told Legal Business: ‘A lot of private equity players are looking to acquire right now and the London market is roaring. The fact that a private equity player is acquiring a majority in an European Central Bank regulated bank makes the deal interesting and complex.’

With €15bn of assets, Luminor was created in 2017 through a combination of Nordea and DNB’s operations in the Baltics.

Meanwhile, a £1.5bn deal that saw Blackstone Property Partners and Telereal Trillium acquire Network Rail’s commercial business estate sealed roles for Kirkland & Ellis, CC, Eversheds and Gowling WLG.

CC and Eversheds acted as legal advisors to Network Rail, with CC’s team comprising partners Franc Peña, Angela Kearns and Adrian Levy and Nick Bartlett leading for Eversheds.

Kirkland and Gowling advised buyers Telereal and Blackstone, with the Kirkland team led by corporate partner Michael Steele and including corporate partner Carlos Gil Rivas. Mike Twinning led the Gowling team.

The portfolio includes 5,200 properties, the majority of which are converted railway arches.

The sites are being sold on a leasehold basis, with Network Rail retaining access rights for the future operation of the railway. The proceeds are being put towards the UK railway upgrade plan.