Legal Business

MoFo and Wachtell lead on T-Mobile’s $26bn ‘seismic shift’ buyout of Sprint

Wachtell, Lipton, Rosen & Katz and Morrison & Foerster have taken the lead on T-Mobile’s takeover of fellow US telecoms operator Sprint, billed as an attempt to make the US a hotbed for innovation.

The proposed $146bn combination sees Washington-headquartered T-Mobile enter into an all-stock deal to merge with Sprint. The transaction gives the Kansas-based target an enterprise value of $59bn and paves the way for the companies’ dual ambition to build the world’s best 5G network.

The combined company will be named T-Mobile and is expected to have the network capacity to rapidly create a nationwide 5G network while having lower costs and greater economies of scale.

Wachtell’s team, led by New York corporate partner Adam Emmerich, is advising T-Mobile and its German parent company Deutsche Telekom. MoFo, meanwhile, is acting for Sprint and its controlling shareholder SoftBank Group with a team led by global M&A practice group co-chair Robert Townsend (San Francisco), corporate partners Brandon Parris (San Francisco) and David Slotkin (Washington DC), antitrust partners David Meyer (Washington DC) and Jeff Jaeckel (Washington DC), regulatory partner Nick Spiliotes (Washington DC), tax partner Bernie Pistillo (San Francisco) and Tokyo office managing partner Ken Siegel.

The team also includes corporate partners Mike O’Bryan (San Francisco) and Scott Lesmes (Washington DC), finance partner Mark Wojciechowski (New York), corporate partner Ivan Smallwood (Tokyo), antitrust partner Mike Miller (New York), technology transactions partner Paul Jahn (San Francisco) and compensation benefits partner Domnick Bozzetti (New York).

Cleary Gottlieb and DLA Piper are acting as regulatory counsel to T-Mobile and Deutsche Telekom. Cleary’s team was led by Washington DC partners Mark Nelson, George Cary, and Jeremy Calsyn, as well as Dan Culley in Brussels. Weil is advising Evercore, the financial adviser to T-Mobile’s committee of independent directors, with a team led by New York corporate partner Michael Aiello and including M&A partner Eoghan Keenan.

Latham & Watkins is advising the committee of independent directors, with a corporate team including partners Charles Ruck in New York and Orange County and Daniel Rees in Orange County. Advising on finance matters are partners Keith Halverstam and Benjamin Cohen in New York and Greg Robins in Los Angeles, while James Barker and Matthew Brill in Washington DC are acting on communications matters.

Steven Croley in Washington DC advised on the Committee on Foreign in the United States (CFIUS) matters, Michael Egge on antitrust and Michele Johnson on compliance. Richards, Layton & Finger served as Delaware counsel to the committee of independent directors of T-Mobile.

Goodwin Procter is legal counsel to the independent transaction committee of the board of directors of Sprint while Skadden, Arps, Slate, Meagher & Flom is regulatory co-counsel and Potter Anderson Corroon is Delaware counsel.

Morgan Stanley is financial adviser to Deutsche Telekom, while Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, and RBC are providing T-Mobile with committed debt financing to support the transaction. PJT Partners is advising T-Mobile on the debt financing associated with the transaction.

After the deal closes – likely between Q4 2018 and Q2 2019 – the new company will be headquartered in Bellevue, Washington with a second headquarters in Overland Park, Kansas.

‘This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation, and a second-to-none network experience – and do it all so much faster than either company could on its own’, said John Legere, president and chief executive officer of T-Mobile US, who will also head the new company.

He added: ‘As industry lines blur and we enter the 5G era, consumers and businesses need a company with the disruptive culture and capabilities to force positive change on their behalf.’

Sprint chief executive Marcelo Claure commented: ‘Sprint and T-Mobile have similar DNA and have eliminated confusing rate plans, converging into one rate plan: Unlimited. We intend to bring this same competitive disruption as we look to build the world’s best 5G network that will make the US a hotbed for innovation. Going from 4G to 5G is like going from black and white to colour TV – it’s a seismic shift – one that only the combined company can unlock nationwide to fuel the next wave of mobile innovation.’

Legal Business

S&C and Wachtell lead on Amazon’s $13.7bn Whole Foods buyout

Amazon moves into food sector with swoop on 460 shops

Sullivan & Cromwell and Wachtell, Lipton, Rosen & Katz led a host of elite US law firms advising Amazon on its $13.7bn purchase of Whole Foods Market, marking the online retailer’s first expansion into the bricks-and-mortar food industry.

Legal Business

S&C and Wachtell lead on Amazon’s $13.7bn Whole Foods buyout

Sullivan & Cromwell and Wachtell Lipton Rosen & Katz lead a host of elite US law firms advising Amazon on its $13.7bn purchase of Whole Foods Market, as the online retailer expands into the bricks and mortar food market.

Sullivan & Cromwell partners Krishna Veeraghavan and Eric Krautheimer are leading on behalf of Amazon while Wachtell Lipton Rosen & Katz partners Daniel Neff, Trevor Norwitz and Sabastian Niles are acting for Whole Foods.

Weil Gotshal & Manges banking partners Morgan Bale and Heather Viets, capital markets partner Faiza Rahman, M&A partner Raymond Gietz and tax partner William Horton all represented Bank of America Merrill Lynch and Goldman Sachs. The banking giants provided debt financing for Amazon to pay for the merger.

Latham & Watkins acts for financial adviser Evercore Partners on the deal, with a team consisting of corporate partners Adel Aslani-Far and Mark Gerstein.  US-headquartered company Whole Foods hired Evercore Partners earlier this year to advise the company on a strategic review of its business operations. 

The merger is the first high-profile role that Sullivan & Cromwell has undertaken this year since advising Deutsche Bank on its £500m fine by the Financial Conduct Authority (FCA) in January.

Sullivan & Cromwell white collar partner Samuel Seymour advised Deutsche Bank on its US settlement with the FCA.

For Latham & Watkins, Amazon’s swoop on the upmarket food grocery market is the first major deal since advising offshore drilling contractor Ensco on its $839m acquisition of Atwood Oceanics. The top US-headquarted firm advised Ensco with a team lead by Houston-based energy partners Sean Wheeler and Debbie Yee. Ensco also turned to Slaughter and May corporate partner Hywel Davies for advice.

Amazon was unavailable for comment.

Legal Business

SullCrom, A&O and Wachtell advise on biggest M&A deal of the year to date as Bayer makes $62bn bid for Monsanto


Sullivan & Cromwell, Allen & Overy, and Wachtell, Lipton, Rosen & Katz all won roles, as healthcare and agriculture giant Bayer placed a bid to acquire agricultural company Monsanto for $62bn, in a deal which would create the world’s biggest agricultural supplier.

In the largest ever bid by a German company, Bayer believes the acquisition will reinforce the company as ‘a global innovation-driven life science company with leadership positions in its core segments’. It expects the acquisition will create profits of approximately $1.5bn across three years ‘plus additional integrated offer benefits in future years’.

Allen & Overy (A&O) is advising Bayer on the financing of the transaction, while Sullivan & Cromwell is advising on M&A matters. Sullivan & Cromwell’s team was led by New York-based corporate partner Matthew Hurd, with Los Angeles based coporate partner Eric Krautheimer and antitrust partners Juan Rodriguez based in London and Steven Holley based in New York also working on the bid.

A&O’s team is led by Frankfurt-based banking and finance partner Neil Weiand, while banking and finance partner Thomas Neubaum and capital markets partner Oliver Seiler are also advising from Frankfurt. Banking and finance partners Nicholas Clark and George Link and corporate partner Stephen Mathews are advising in London while corporate partner Hans Diekmann and tax partner Marcus Helios are acting from Düsseldorf.

Wachtell, Lipton, Rosen & Katz will advise Monsanto through the potential acquisition. The company confirmed it had received the ‘unsolicited’ bid from Bayers, but ‘there is no assurance that any transaction will be entered into or consummated, or on what terms’.

The bid is subject to due diligence, regulatory approvals and other conditions.

The deal is the second largest M&A transaction to date this year, beating out China National Chemical Corp’s $43bn bid for Swiss seeds and pesticides group Syngenta in February. Advisers on that deal included Simpson Thacher & Bartlett, Davis Polk & Wardwell, and Swiss firm Bär & Karrer.


Legal Business

Allen & Overy and Wachtell take leads on Deutsche Börse spin-off


Magic Circle firm Allen & Overy (A&O) has taken a lead role acting for Deutsche Börse as it spins off its US options exchange operator International Securities Exchange, in a move which looks to aid the German stock exchange operator’s proposed merger with the London Stock Exchange (LSE).

A&O is acting opposite Wachtell, Lipton, Rosen & Katz on the sale of International Securities Exchange to Wachtell client Nasdaq for more than $1.1bn.

A&O’s team is led by New York M&A partner Peter Harwich, with support from Frankfurt partner Hartmut Krause. Other specialist members from the firm’s New York office include tax partner Jack Heinberg and Elaine Johnston from the firm’s antitrust team.

The firm has advised Deutsche Börse in the past, with Krause leading A&O’s advice to the stock exchange operator when it signed a landmark agreement between Germany and China to create the first dedicated platform for yuan-denominated trading outside China back in November last year.

Wachtell’s advice for US operator Nasdaq was led by corporate partner David Lam. NASDAQ was advised by Jones Day on regulatory aspects of the transaction.

Deutsche Börse is currently engaged in merger discussions with the LSE, in the third attempt of the rivals to merge. On this transaction the German stock exchange operator is being advised by Linklaters corporate partner Roger Barron.

LSE has engaged Freshfields Bruckhaus Deringer, whose team is led by partners Andrew Hutchings, Mark Rawlinson and London M&A co-head Piers Prichard Jones.

The London and Frankfurt exchanges said they were in ‘detailed discussions about a potential merger of equals’, which if it goes ahead, will create a European trading powerhouse under a new holding company that would give Deutsche Börse shareholders a 54.4% stake and LSE shareholders 45.6%.

Legal Business

US and Irish firms act on $16.5bn Tyco-Johnson Controls merger


Simpson Thacher & Bartlett, Wachtell, Lipton, Rosen & Katz, A&L Goodbody and Arthur Cox have all landed roles advising on the $16.5bn merger of industrial company Johnson Controls and security provider Tyco – a deal that will lower the new company’s tax bill.

The US maker of car batteries and heating equipment Johnson Controls will combine with Cork-based Tyco, with the merged companies’ headquarters to be based in Tyco’s homeland Ireland.

The combined company will be renamed Johnson Controls and will be domiciled in low-tax Ireland. The deal is expected to save the new company at least $150m in annual tax. The combination will be tax-free to Tyco shareholders and taxable to Johnson Controls shareholders.

Simpson Thacher represented Tyco International led by New York-based M&A partners Alan Klein and Elizabeth Cooper. Irish firm Arthur Cox also provided advice with corporate partner Stephen Ranalow leading alongside with corporate partners Maura McLaughlin and Geoff Moore, with Fintan Clancy on tax and Phil Cody on finance.

Skadden Arps represented Tyco’s lead financial adviser Lazard with corporate partners Eileen Nugent and Michael Chitwood acting. Citi provided the committed financing for the transaction and Goldman Sachs served as financial adviser for Tyco.

Wachtell and A&L Goodbody advised Johnson Controls, with Cleary Gottlieb Steen & Hamilton leading on competition aspects. Cleary’s antitrust team on the deal is led by Washington based partner Brian Byrne, and Brussels based partner Nicholas Levy. Centerview Partners served as lead financial adviser, with Barclays also advising.

Under the terms of the agreement, Johnson Controls shareholders will own approximately 56% of the equity of the combined company and receive aggregate cash consideration of approximately $3.9bn. Current Tyco shareholders will own approximately 44% of the equity of the combined company.

The transaction is expected to complete by the end of fiscal year 2016 subject conditions including regulatory approvals and consent from the shareholders of both companies.

By moving its headquarters to Cork, Johnson Controls becomes the latest US firm to exploit Ireland’s lower tax regime, in an inversion deal similar to last year’s planned Pfizer-Allergan deal. Firms to win mandates on that deal include Wachtell, Skadden, Arps, Slate, Meagher & Flom; and A&L Goodbody acting as Pfizer’s legal advisers, alongside Morgan Lewis and Clifford Chance. Debevoise & Plimpton acts for Pfizer’s financial advisers.

Allergan turned to Cleary Gottlieb Steen & Hamilton, Latham & Watkins and Arthur Cox for the deal.

Legal Business

Macfarlanes combines with Wachtell for new client Visa on €21.2bn European transaction


Macfarlanes has scored a lead role advising US company Visa on its €21.2bn acquisition of Visa Europe alongside US firm Wachtell, Lipton, Rosen & Katz, while Linklaters also secured a leading role advising the other side.

In a transaction with up-front consideration of approximately €16.5bn and the potential for an additional earn-out of up to €4.7bn on the fourth anniversary of its closing, Visa and Visa Europe said the deal creates a ‘single global Visa business.’ Visa Europe, an association owned and operated by over 3,000 European financial institutions, has annual payment volumes of over $1.5trn and processes over 18 billion transactions each year.

The Macfarlanes team, working alongside Wachtell, Lipton, Rosen & Katz, was led by M&A partners Graham Gibb and Nicholas Barclay. The two firms previously combined to great effect to advise Verizon on its acquisition of Vodafone’s 45% interest in Verizon Wireless for $130bn.

Milbank, Tweed, Hadley & McCloy also assisted Visa on the deal with a team lead by the firm’s London co-managing partner Julian Stait. 

The Linklaters team advising Visa Europe comprised US corporate partner Scott Sonnenblick in New York, as well as partners Aedamar Comiskey and Stephen Griffin from the London corporate team.

Recent transactions for Macfarlanes include advising client Exor on its increased investment in The Economist Group for £469m in July, while Freshfields Bruckhaus Deringer advised seller Pearson.

Last year Linklaters advised Visa Europe on high profile litigation work, alongside Milbank, to secure a judgment in favour of the company after 12 major UK retailers led by the Arcadia Group sought damages in relation to Visa’s setting of interchange rates.

Commenting on the merger, Visa chief executive Charles Scharf said: ‘This transaction is beneficial for financial institutions, acquirers, merchants, cardholders, and other partners, as well as for our employees and shareholders.’

The deal is subject to regulatory approvals and is expected to close in the third quarter of 2016.

Legal Business

Dealwatch: US firms line up on the $55bn takeover of Time Warner Cable


In one of the largest M&A deals so far this year, US law firms continued to show their dominance of their home market with six securing roles on the $55bn takeover of Time Warner Cable by Charter Communications.

Charter Communications confirmed yesterday it would acquire Time Warner Cable in a deal valuing the company, whose channel stable includes HBO, CNN, Cartoon Network and DC Comics, at $79bn.

New York-based Steven Cohen, a corporate partner at Wachtell, Lipton, Rosen & Katz since 2000, spearheaded the deal for Charter Communications, the fourth-largest cable operator in the US and which is paying $55bn in stock and cash for the company. Kirkland & Ellis is representing Charter as financing counsel.

Time Warner Cable enlisted Paul, Weiss, Rifkind, Wharton & Garrison, Latham & Watkins and Skadden, Arps, Slate, Meagher & Flom to handle its sale.

New York corporate partners Robert Schumer, Ariel Deckelbaum and Ross Fieldston led the legal team at Paul Weiss while Washington DC-based Latham partners Matthew Brill and James Barker advised Time Warner Cable on strategic and regulatory advice, with Michael Egge handling antitrust matters.

The acquisition was backed by cable mogul John Malone’s Liberty Broadband, Charter’s largest shareholder, which agreed to purchase $4.3bn of Charter shares. Liberty is expected to control 25% of the aggregate voting power of New Charter and is expected to be its largest stockholder. Liberty instructed New York-based Baker Botts corporate partner Buzz McGrath to lead the deal, with support from corporate partner Renee Wilm and tax partner Tamar Stanley.

As part of the new company, Charter also purchased video service provider Bright House Networks for $10.4bn. Sullivan & Cromwell represented Bright House Networks and its owner, Advance/Newhouse Partnership, in connection with the sale. The team at Sullivan was led by New York-based corporate partner Brian Hamilton, with support from tax partner Ronald Creamer and antitrust partner Yvonne Quinn.

Legal Business

Wachtell, Skadden and Goodwin Procter take lead roles on Bank of America’s $16.6bn settlement


Wachtell, Lipton Rosen & Katz; Skadden Arps Slate Meagher & Flom and Goodwin Procter have taken the lead roles on Bank of America’s $16.6bn settlement with the US Department of Justice (DoJ), federal agencies and six US states.

In what is the largest civil settlement with a single entity in American history, Bank of America (BoA) has agreed to pay the sum of US$16.6bn after long-standing federal and state allegations that the BoA and its former and current subsidiaries, including Countrywide Financial Corporation and Merrill Lynch, sold mortgage-backed securities to investors that contributed to the real estate market collapse amid the 2008 economic downturn.

Of the record-breaking $16.6bn resolution, almost $10bn will be paid to settle federal and state civil claims by various entities related to RMBS, CDOs and other types of fraud. BoA will pay a total of $9.6bn in cash and provide approximately $7bn worth of consumer relief. The cash portion consists of a $5bn civil monetary penalty and $4.6bn in compensatory remediation payments.

Wachtell litigator Meyer Koplow advised BoA on the settlement, while Skadden Arps corporate and commercial litigator Charles Smith also represented defendant BoA and Merrill Lynch on the SEC portion of the deal. Goodwin Procter partners Brian Pastuszenski and Inez Friedman-Boyce advised other BoA entities on its deal with the Federal Deposit Insurance Corporation.

Litigation boutique Bailey & Glasser’s Benjamin Bailey and Grais & Ellsworth’s David Grais acted for the Federal Deposit Insurance Corporation (FDIC).

The settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force and its Residential Mortgage-Backed Securities (RMBS) Working Group, which has recovered $36.65bn to date for US consumers and investors.

US attorney Anne Tompkins for the Western District of North Carolina said: ‘[The] settlement attests to the fact that fraud pervaded every level of the RMBS industry, including purportedly prime securities, which formed the basis of our filed complaint. Even reputable institutions like Bank of America caved to the pernicious forces of greed and cut corners, putting profits ahead of their customers. As we deal with the aftermath of the financial meltdown and rebuild our economy, we will hold accountable firms that contributed to the economic crisis. [The] settlement makes clear that my office will not sit idly while fraud occurs in our backyard.’

Legal Business

Wachtell, A&O and Gibson Dunn lead on Walgreens acquisition of Boots


The largest drug retailer in the US, Walgreens, has instructed Wachtell, Lipton, Rosen & Katz and Magic Circle firm Allen & Overy to handle its full combination with Nottingham-based chemist Alliance Boots.

Walgreens board of directors has exercised an option to complete the acquisition of the remaining 55% of Alliance Boots after an initial 45% investment completed in 2012. The $9bn deal will create a pharmacy-led retailer with more than 11,000 stores in 10 countries. Walgreens expects to close the transaction in the first quarter of 2015, with the combination also set to establish the world’s largest pharmaceutical wholesale and distribution network with more than 370 distribution centres delivering to more than 180,000 pharmacies, doctors, health centres and hospitals in 20 countries.

Walgreens Boots Alliance will be headquartered in Chicago, declining to carry out a tax inversion that would have added to the $1bn in savings planned by end of 2017. Walgreens said in a statement that the combined size and scale of the companies will help the two to expand supply while addressing the rising cost of prescription drugs in America and worldwide.

The A&O team was led by Amsterdam corporate partner Justin Steer, alongside the office’s head of competition Paul Glazener.

Stefano Pessina, executive chairman of Alliance Boots, said: ‘The expected creation of the new enterprise will represent the most significant milestone in the history of Alliance Boots and, importantly, a very positive step for the health care industry as a whole. Together with Walgreens, we have already made good progress over the past two years and I strongly believe that the merger will bring significant growth opportunities for both mature and emerging markets.’

Investment banks Goldman Sachs and Lazard acted as financial advisers on the transaction. Gibson Dunn’s New York corporate partners Eduardo Gallardo and Dennis Friedman were enlisted by Lazard.