www.iflr.com IFLR/December/January 2012 65 W ith the European debt crisis wreaking havoc in the western markets, it’s no surprise that the M&A market has suffered a knock-on effect. A large number of potential deals are on hold in Europe, and the ones that are going ahead have had to be both very carefully negotiated but ready to launch at a moment’s notice. However away from Europe, prospects have been much brighter. The US M&A market bounced back spectacularly. After 2010 was dominated by distressed activity, corporates flush with cash hit the market in their droves in 2011. Low interest rates also allowed private equity firms to compete for assets, leading to higher asking prices in some instances. The Bric countries continued their rise unsurprisingly. Brazil had a very strong year, with energy and communications deals driving the market forward. Chinese outbound M&A continues to thrive despite competition concerns in Europe, with domestic companies targeting high-tech strategic assets. Inbound M&A is still strong with foreign investors concentrating on manufacturing and materials targets. Indian M&A market activity is frantic. The country experienced a wave of inbound and outbound deals following dramatic regulatory changes. Russia too is seeing more interest but lawyers note that the corporate framework still needs more development. With each region having such differing opinions, the IFLR1000’s 2012 M&A survey therefore comes at a critical time in the development of the international legal market. IFLR1000’s journalists, based in New York, London and Hong Kong, spent over 12,000 hours compiling the rankings by conducting hundreds of interviews with leading private- practice partners and key in-house counsel. The journalists also waded through extensive deal submissions from hundreds of law firms, so you don’t have to. The end result is arguably the most in- depth analysis of the financial and corporate legal markets available.The 2012 edition of the IFLR1000 is available in full, for free online at iflr1000.com. Albania this year has seen some interest from investors in the energy sector. To this end, there has been a good deal of purely private investments in renewables such as hydro and wind power. Concessions granted to local and some international investors facilitate such interest and lately Italian companies have been considering Albania as a potential market for renewables to transfer back to Italy. M&A is the preferred approach for investors and it is the main way Italian companies access the Albanian market. Although there has been some activity this year (especially in energy), one should not be under any illusions, as such activity is described only as stable. Looking ahead there is hope for some new activity as the market anticipates a fresh drive toward privatisation from a government looking to rid itself of its remaining public assets. In the legal market, one trend that has materialised is the lure of Kosovo with most of the high-end firms seeking to exploit the business opportunities arising there “Kosovo is a very young place. All the biggest firms have been there and tried to send their lawyers,” says one local partner. Practitioners are keen to see how 2012 will shape up. Recommended firms Tier 1 Boga & Associates Kalo & Associates Tonucci & Partners Wolf Theiss Tier 2 Hoxha Memi & Hoxha Loloci & Associates Tier 3 Apicella & Partners Drakopoulos Law Firm Albania Argentina’s trend for mid-sized mergers continued this year, while larger transactions were sprinkled about. “M&A will have a lot of work,” predicts one attorney. “Profiles of buyers are different: before it was hedge funds, now it is strategic buyers.” Another partner laments the scarcity of big transactions, despite a greater volume of deals. “The values of the transactions are very low,” he says. “You can count on your hand the number of big deals.” The October 2011 elections have added some uncertainty, but ominous inflationary issues, rather than elections, may have more to do with any slow-down in M&A activity at the year’s close. “There is a perception that nobody knows what will happen next year because of the inflationary pressures,” says one attorney. With inflation at anywhere from 10-30% and a government that has ramped up spending due to a commodities boom, many in the market are wondering how the economy will fare. In January 2010, the Central Bank of Argentina hired Brazil’s state-owned mint to print three billion pesos, as Argentine banks struggled to meet demand for 100-peso notes. The government has also ventured further into the private market, eliminating a limit on shareholder voting rights for state-owned pension funds. Recommended firms Tier 1 Marval O’Farrell & Mairal Tier 2 Bruchou Fernández Madero & Lombardi Pérez Alati Grondona Benites Arntsen & Martínez de Hoz Tier 3 Allende & Brea Errecondo Salaverri Dellatorre González & Burgio Estudio Beccar Varela Argentina A matter of perspective The IFLR1000’s M&A law firm rankings show a lawyer’s view of the market depends on where they’re standing Also in this section: 84 Latin America’s evolving antitrust regimes 85 Approaching financial adviser conflicts post-Del Monte 88 Beware Hong Kong's anti-corruption watchdog 90 The EC v Chinese state-owned companies Mergers & acquisitions M&A REVIEW
Transcript
www.iflr.com IFLR/December/January 2012 65
With the European debt crisiswreaking havoc in thewestern markets, it’s nosurprise that the M&A
market has suffered a knock-on effect. A large number of potential deals are on
hold in Europe, and the ones that are goingahead have had to be both very carefullynegotiated but ready to launch at a moment’snotice.
However away from Europe, prospects havebeen much brighter. The US M&A marketbounced back spectacularly. After 2010 wasdominated by distressed activity, corporates
flush with cash hit the market in their drovesin 2011.
Low interest rates also allowed privateequity firms to compete for assets, leading tohigher asking prices in some instances.
The Bric countries continued their riseunsurprisingly. Brazil had a very strong year,with energy and communications dealsdriving the market forward.
Chinese outbound M&A continues tothrive despite competition concerns inEurope, with domestic companies targetinghigh-tech strategic assets. Inbound M&A isstill strong with foreign investors
concentrating on manufacturing andmaterials targets.
Indian M&A market activity is frantic. Thecountry experienced a wave of inbound andoutbound deals following dramatic regulatorychanges. Russia too is seeing more interest butlawyers note that the corporate framework stillneeds more development.
With each region having such differingopinions, the IFLR1000’s 2012 M&A surveytherefore comes at a critical time in thedevelopment of the international legal market.
IFLR1000’s journalists, based in New York,London and Hong Kong, spent over 12,000hours compiling the rankings by conductinghundreds of interviews with leading private-practice partners and key in-house counsel.
The journalists also waded throughextensive deal submissions from hundreds oflaw firms, so you don’t have to.
The end result is arguably the most in-depth analysis of the financial and corporatelegal markets available.The 2012 edition ofthe IFLR1000 is available in full, for freeonline at iflr1000.com.
Albania this year has seen someinterest from investors in theenergy sector.
To this end, there has been agood deal of purely privateinvestments in renewables suchas hydro and wind power.
Concessions granted to localand some international investorsfacilitate such interest and latelyItalian companies have beenconsidering Albania as apotential market for renewablesto transfer back to Italy. M&A is
the preferred approach forinvestors and it is the main wayItalian companies access theAlbanian market.
Although there has been someactivity this year (especially inenergy), one should not beunder any illusions, as suchactivity is described only asstable.
Looking ahead there is hopefor some new activity as themarket anticipates a fresh drivetoward privatisation from agovernment looking to rid itselfof its remaining public assets.
In the legal market, one trendthat has materialised is the lureof Kosovo with most of thehigh-end firms seeking toexploit the businessopportunities arising there
“Kosovo is a very young place.All the biggest firms have beenthere and tried to send theirlawyers,” says one local partner.
Practitioners are keen to seehow 2012 will shape up.
Recommended firms
Tier 1
Boga & Associates
Kalo & Associates
Tonucci & Partners
Wolf Theiss
Tier 2
Hoxha Memi & Hoxha
Loloci & Associates
Tier 3
Apicella & Partners
Drakopoulos Law Firm
Albania
Argentina’s trend for mid-sizedmergers continued this year, whilelarger transactions were sprinkledabout. “M&A will have a lot ofwork,” predicts one attorney.“Profiles of buyers are different:before it was hedge funds, now itis strategic buyers.”
Another partner laments thescarcity of big transactions,despite a greater volume of deals.
“The values of the transactionsare very low,” he says. “You can
count on your hand the numberof big deals.”
The October 2011 electionshave added some uncertainty, butominous inflationary issues,rather than elections, may havemore to do with any slow-downin M&A activity at the year’sclose. “There is a perception thatnobody knows what will happennext year because of theinflationary pressures,” says oneattorney.
With inflation at anywherefrom 10-30% and a governmentthat has ramped up spending dueto a commodities boom, many inthe market are wondering howthe economy will fare.
In January 2010, the CentralBank of Argentina hired Brazil’sstate-owned mint to print threebillion pesos, as Argentine banksstruggled to meet demand for100-peso notes. The governmenthas also ventured further into theprivate market, eliminating alimit on shareholder voting rightsfor state-owned pension funds.
Recommended firms
Tier 1
Marval O’Farrell & Mairal
Tier 2
Bruchou Fernández Madero &
Lombardi
Pérez Alati Grondona Benites
Arntsen & Martínez de Hoz
Tier 3
Allende & Brea
Errecondo Salaverri Dellatorre
González & Burgio
Estudio Beccar Varela
Argentina
A matter of perspectiveThe IFLR1000’s M&A law firm rankings show a lawyer’sview of the market depends on where they’re standing
Also in this section:
84 Latin America’s evolving antitrust regimes85 Approaching financial adviser conflicts post-Del Monte88 Beware Hong Kong's anti-corruption watchdog90 The EC v Chinese state-owned companies
Mergers & acquisitions
M&A REVIEW
66 IFLR/December/January 2012 www.iflr.com
M&A REVIEW
M&A has been a very mixed bagand opinions from partners rangefrom very positive to quitenegative in Belgium.
“Fairly dislocated andunpredictable, the deal volumewas much lower than in 2005,2006 and 2007, there was lessprivate equity activity, although
there are a lot of funds that wouldbuy certain assets if the debtfinancing came up. Sellers arewary of selling as the valuationsare still a bit low,” says onepartner.
However another firm saw a lotof activity in the media sector anda lot in the FIG (financialinstitutions group) sector, inrenewable energy and in theprivate equity world.
A another firm says: “Privateequity is really heating up, forexample GIMV, listed on theBelgian stock exchange, is gettingmore active.”
A few things are more certain.Public M&A and publictakeovers have been slow whileprivate equity only started to pickup in 2011. According to onepartner: “Private equity houses arenow looking at their files, somehave changed strategy, not takingwhole share capital but takingover chunks with others, some arenow setting up funds anddefining strategies.”
Recommended firms
Tier 1
Allen & Overy
Cleary Gottlieb Steen &
Hamilton
Linklaters
Tier 2
Eubelius
Freshfields Bruckhaus
Deringer
Stibbe
Tier 3
Baker & McKenzie
Clifford Chance
Liedekerke
Loyens & Loeff
NautaDutilh
White & Case
Belgium
“Towards the third and fourthquarter [of 2010] we have seen anuptick in activity. We have alsoseen transactions coming back tonormal – not really a distressedbackground but rather strategicdeals,” is one lawyer’s assessmentof the last year in Austria. Thispositive trend towards straightM&A is verified by others: “Iwould guess the wave of distressedwork is dying out now,” says one.
Necessity, however, is often stillthe catalyst for transactions. “Inthe energy sector there has beenquite some activity. Some verylarge players are pulling out ofmarkets not because they arestrategic but because they justneed cash now,” says one lawyer.The IT, biotech, pharmaceuticaland financial services sectors havealso been cited as areas of activity.The latter is one area M&Alawyers concur is rife forconsolidation. Nationalised bankHypo Group Alpe-Adria teeterson the brink of default and ErsteBank has already put large assetsup for sale.
Growth in M&A in Austria ispicking up, albeit slowly. Thereare not enough significanttransactions to satisfy the largerfirms but there has been a flurryof deals in the mid-market for thesmaller ones. “There are big ticketdeals going on ... with privateequity [and] with private M&A,”said one local partner.
Recommended firms
Tier 1
Freshfields Bruckhaus
Deringer
Schoenherr
Wolf Theiss
Tier 2
Binder Grösswang
Cerha Hempel Spiegelfeld
Hlawati
Dorda Brugger Jordis
Tier 3
CMS Reich-Rohrwig Hainz
Fiebinger Polak Leon &
Partners
Austria
www.iflr.com IFLR/December/January 2012 67
M&A REVIEW
Business is booming for Brazilian privateequity and M&A lawyers. Since the 1990s,investors have been attracted by the country’shuge domestic potential, economic growthand business-friendly policies. By April 2011,Brazil had overtaken China as the top targetfor private equity investment, according to areport by the Emerging Market Private Equity
Association. One attorney remarks, “It’s nolonger BRIC – it’s Brazil”
Although the 2007-08 collapse of theeconomic systems in Europe and the UScaused some disruption, lawyers report thatthe Brazilian markets have since made acomeback. According to a 2011 report byBloomberg, Brazil’s M&A activity is at a ten-year high. Energy and communications wereamongst the hottest sectors, with blockbusterssuch as the sale of Brasilcel to Telefonica, andthe sale of Repsol YPF Brasil to the ChinaPetroleum and Chemical Company. “Anumber of transactions were reallyastounding,” says one partner.
In particular, attorneys spent much of 2010anticipating the “mammoth” Petrobras deal.In the world’s biggest stock offering, the state-owned energy company raised $67 billionwhen the transaction finally took place inSeptember that year. The event kept bothBrazilian lawyers and their foreigncounterparts busy, made internationalheadlines, and was described by President LuizInacio Lula da Silva as “a new chapter inBrazil’s development”.
Practitioners report that consumer goods,mining, real estate, education andentertainment have also been doing well. One
partner says that firms and their clients are“looking to market with very goodexpectations”, while another notes that“bankers are very bullish about the equitymarket”. In particular, lawyers have been busyassisting private equity asset managers withobtaining regulatory approval from theBrazilian SEC.
The explosion in activity has been helpedby government incentives designed to increaseforeign investment, such as the BrazilianParticipation Fund (FIP). FIPs are vehicleswhich hold equity ownership interests incompanies under a structure similar to that ofa holding company. For foreign investors, theyoffer the added advantage that income orcapital gains are not subject to any Brazilianwithholding income tax, as long as certainrequirements are met. In January 2011, thegovernment lowered taxes for foreigninvestments in long-term Brazilian FIEEemerging company funds and FIP holdingfunds from 6% to 2%.
Whilst attorneys are optimistic that dealflow will continue to increase over the next 12months, challenges lie ahead. These includelong-standing issues such as controllinginflation and currency valuation, andmaintaining liquidity in the credit markets.
Recommended firms
Tier 1
Barbosa Müssnich & Aragão
Machado Meyer Sendacz e Opice
Mattos Filho Veiga Filho, Marrey Jr e
Quiroga
Pinheiro Neto
Tier 2
Pinheiro Guimarães
Souza Cescon Barrieu & Flesch
TozziniFreire
Tier 3
Demarest e Almeida
Levy & Salomão
Motta Fernandes Rocha
Trench Rossi e Watanabe
Ulhôa Canto Rezende Guerra
Veirano
Brazil
68 IFLR/December/January 2012 www.iflr.com
M&A REVIEW
Colombian lawyers remainbullish on the prospects ofColombia’s growing economy.The “increase in foreigninvestment has been incredible,”says one attorney. “The trend isthat it won’t just stay in minerals.”Multiple industries are benefiting,including oil, mining andtourism, and lawyers are seeing anupturn in work in the privateequity and project finance areas.
Adding to these strong
prospects are the string of freetrade agreements (FTAs) whichColombia entered into during2010. In March of that year,Colombia finalised an FTA withthe EU that eased importconditions on Colombian coffee,banana, and sugar exports. Thiswas followed months later by asimilar agreement with Canada,which entered into force in July2011, granting preferentialmarket access to over 33 millionwell-heeled consumers forColombian producers. Moreover,passage of the long-stalledColombian-US FTA seems likelyto pass more than ever this year,another welcome developmentand massive export market.
“We know there will be lots offoreign investment,” says onelawyer. It will be needed; thegovernment is planning, or hasalready started, massive upgradesin multiple infrastructure sectors,including road, rail, airports,ports, and public transport.
Recommended firms
Tier 1
Brigard & Urrutia
Gómez-Pinzón Zuleta
Posse Herrera & Ruiz
Prieto & Carrizosa
Tier 2
Baker & McKenzie
Cárdenas & Cárdenas
Tier 3
Holguín Neira & Pombo
José Lloreda Camacho & Co
Parra Rodríguez & Cavelier
Colombia
www.iflr.com IFLR/December/January 2012 69
M&A REVIEW
Inbound and outbound M&A both remainalive and well in China related deals, and bothareas seem to show few lingering effects of thefinancial crisis. This year’s most exciting actionon the outbound side illuminates one of themost significant continuing trends in theM&A space, as more and different types ofcompanies are venturing beyond China’sborders for acquisitions.
While Chinese companies have historicallysought targets in the natural resources,mining, oil and gas and low-endmanufacturing sectors, there seems to be agrowing trend for Chinese companies to makemore high-tech, strategic acquisitions.
Chinese companies are becomingincreasingly likely to target European orAmerican international brands and toprioritise buying an overseas, establishedbrand as part of their growth strategy. There isalso increasing interest in buying high-endtechnology in the high-tech and life sciencessectors, rather than solely developingtechnology in-house.
On the inbound side, foreign companiesstill show a strong interest in acquiringChinese manufacturing and materials targets.
Joint ventures between foreign-ownedcompanies and Chinese entities are alsobecoming increasingly common.
Foreign firms
Recommended firms
Tier 1
Allen & Overy
Clifford Chance
Freshfields Bruckhaus Deringer
Linklaters
Shearman & Sterling
Skadden Arps Slate Meagher & Flom
Tier 2
Baker & McKenzie
Herbert Smith
O’Melveny & Myers
Paul Weiss Rifkind Wharton & Garrison
Simpson Thacher & Bartlett
Sullivan & Cromwell
Tier 3
Cleary Gottlieb Steen & Hamilton
Davis Polk & Wardwell
Hogan Lovells
Latham & Watkins
Mallesons Stephen Jaques
Mayer Brown JSM
Norton Rose
Orrick Herrington & Sutcliffe
Paul Hastings Janofsky & Walker
Sidley Austin
Slaughter and May
Weil Gotshal & Manges
White & Case
Local firms
Recommended firms
Tier 1
Fangda Partners
Haiwen & Partners
Jun He Law Offices
King & Wood
Zhong Lun Law Firm
Tier 2
Jingtian & Gongcheng
Llinks Law Offices
Tier 3
Allbright Law Offices
Boss & Young
Commerce and Finance Law Offices
Global Law Office
Grandall Legal Group
Guantao Law Firm
China
Cyprus’ double taxation treatieswith other jurisdictions prove tobe the main driving force behindcross-border mandates, and forsome even more needs to be done:“If you ask me [about doubletaxation treaties], I would sayCyprus needs to increase thenumber of the treaties,” says one
partner, “the more doubletaxation treaties, the better.”Another adds: “The treaties havea huge impact, it is one of thereasons why people are sointerested in coming to Cyprus.They use Cyprus in their groupstructures, and set up holdingcompanies. This generates hugelitigation and huge corporatework by company registrations,by drafting contracts forfinancing, M&A. It generates alot of work.”
Another topical issue beingdiscussed is the discovery ofsubstantial natural gas deposits,60 miles off the coast. It isbelieved that together with theexisting oil and gas deposits in theMiddle East, they will form a newsource of energy supply toEurope.
“Imagine if tomorrow webecome an energy country, thewhole landscape [of work] couldbe totally changed,” says onecorporate lawyer.
Recommended firms
Tier 1
Andreas Neocleous & Co
Antis Triantafyllides & Sons
Chrysses Demetriades & Co
Tier 2
Chryssafinis & Polyviou
Dr K Chrysostomides & Co
Georgiades & Pelides
L Papaphilippou & Co
Montanios & Montanios
Tier 3
Aristodemou Loizides Yiolitis
George L Savvides & Co
Ioannides Demetriou
Tassos Papadopoulos &
Associates
CyprusTassos Papadopoulos & AssociatesAbout the firmTassos Papadopoulos & Associates is a leading law firm ofproviding a full range of legal services. The firm maintains itsprincipal practice base in Nicosia and is associated withlocal firms in all towns of Cyprus; It is also a member ofmajor international networks of independent law firms withseveral thousand well-connected lawyers in over 90 coun-tries. The firm's participation in these networks enables itsmembers to guide clients daily through the challenges ofglobal business and to provide them with a rapid and thor-ough response to the highest international and local stan-dards. Tassos Papadopoulos & Associates was establishedby the majority of partners and associates of the formerTassos Papadopoulos & Co law partnership (one of the old-est and largest law firms in Cyprus) which was dissolved inJune 2007 by mutual agreement between its then partners.
2, Sofouli Street, Chantecrair Building The second Floor 1096 Nicosia Cyprus
The downturn in M&A dealflow from last year has finallylevelled out it would seem,with some confidencereturning to the market.
However partners continueto qualify their optimism bysaying that the Danish marketstill shows plenty of signs ofvolatility.
“I think it’s fair to say thatdeals have become even moredifficult to execute. There has
been a bigger gap betweenbuyer and seller agreementsthan ever before,” says one.
Another adds, “Funding fordeals is also hard to find. Thereis a whole different level ofgearing and leverage now.”
A major trend in this area isto do with private equity anddivestment, and a number ofdeals this year have been of thistype.
“There has been a pickup inprivate equity investors exitingtheir investments,” says onepartner. “
In fact, there was one ofthese that happened that wasthe first for many years inEurope and marked an openingin the market if you ask me, aswork then started picking upagain.”
Another local partner agrees:“There has been a number ofprivate equity divestments, andsome large distressed work.However, there have been nolarge distressed sales.”
Recommended firms
Tier 1
Gorrissen Federspiel
Kromann Reumert
Plesner
Tier 2
Accura
Bech-Bruun
Bruun & Hjejle
Tier 3
Horten
Lett
Lind Cadovius
Philip & Partners
Denmark
The last six months have seen asignificant upswing in terms ofM&A work. This has resulted intwo of the largest transactions inthe Czech market closing in thespace of a fortnight in January.The first was the acquisition ofCeské Radiokomunikace byMacquarie EuropeanInfrastructure Fund and the
second was the 50% acquisitionof Czech Coal by Cyprus basedIndoverse Czech CoalInvestments.
The last few years have seennumerous transactions failing toclose, with the majority of workrelating to distressed sales, sales ofnon-core assets by multinationalsand disposals by financialinstitutions following receipt ofstate aid.
However the forecast for 2011is more optimistic. Budgetdeficits are driving the sale ofgovernment assets by the newlyelected centre right government.Most activity has been seen in theenergy and utilities sector, whichhas seen privatisations, significantasset swaps and activity aroundrenewables.
Confidence in the market isreturning, as the economyrecovers and financing conditionsease in along with the upturn inM&A activity. “Solar explodedbecause of the state,” says onepartner.
Recommended firms
Tier 1
Clifford Chance
White & Case
Tier 2
Allen & Overy
Baker & McKenzie
BBH
Glatzova & Co
Weil Gotshal & Manges
Tier 3
CMS Cameron McKenna
Havel Holásek & Partners
Kocian Solc Balastik
PRK Partners
Salans
Weinhold Legal
Czech Republic
72 IFLR/December/January 2012 www.iflr.com
M&A REVIEW
In line with the internationalmarkets, there has been anincrease in deals in the FrenchM&A and private equity sectorsin the last year.
“I would say we’ve seen anincrease of the deals in the last12 months, especially in the lastsix months, there has been aboom in the number and thesize of the deals in the last sixmonths in both sectors,” saysone partner,
Another partner agrees:“M&A and private equity arevery active and things are veryinterdependent.”
The reasons behind thisreflect the re-emergence ofacquisition and LBO financing.
“A number of companies havenot been hit as expected so theystill have cash to acquirecompanies suffering from thefinancial crisis”, says one partnerwho says that in particular“some of the private houses havecash to spend”.
Recommended firms
Tier 1
Bredin Prat
Cleary Gottlieb Steen &
Hamilton
Darrois Villey Maillot Brochier
Linklaters
Tier 2
Clifford Chance
Freshfields Bruckhaus
Deringer
Gide Loyrette Nouel
Sullivan & Cromwell
Weil Gotshal & Manges
Willkie Farr & Gallagher
Tier 3
Allen & Overy
Davis Polk & Wardwell
De Pardieu Brocas Maffei
Debevoise & Plimpton
Jones Day
Latham & Watkins
Orrick Rambaud Martel
Shearman & Sterling
Skadden Arps Slate Meagher
& Flom
White & Case
France
While not as resilient as thecountry’s economy, the M&Amarket is showing signs ofrecovery. Firms note that buyersare stimulating the market,German companies are cash richand banks have built up a capital
base and can afford to back themagain so according to one partner,“there is generally financingavailable”.
“I think a confidence hasreturned. Everyone was shockedafter the financial crisis andlooking to sort their portfoliosout, definitely on the Germanside of the market, now people arevery confident about their abilityto service debt,” says one partner.
On the legislative side, theGerman takeover directive is duefor review at the end of this year.
Under German law aprospective buyer is required tomake a tender offer once it holds30% of a company’s shares, but ifit fails it does not have to makeany additional bid and cancontinue to increase its stake,without seeking shareholderapproval. According to onecorporate partner “it may be alsothat the German legislator willlook more closely at the Germantakeover code.”
Recommended firms
Tier 1
Freshfields Bruckhaus
Deringer
Hengeler Mueller
Tier 2
Clifford Chance
Gleiss Lutz
Linklaters
Tier 3
Allen & Overy
Baker & McKenzie
Cleary Gottlieb Steen &
Hamilton
CMS Hasche Sigle
Hogan Lovells
Latham & Watkins
Skadden Arps Slate Meagher
& Flom
White & Case
Germany
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Despite its ratification of theDominican Republic-CentralAmerican Free Trade Agreementin 2006, the country’s toweringpolitical and economic issuesremain obstacles to attractingforeign investment.
To combat the problem and toconfront the ever-increasingpresence of Mexican drug cartels,the government passed the Ley deExticion De Dominio, a sweepinglegislative package that will have atremendous effect on regularbusiness activity. Entering intoforce in June 2011, the lawstrengthens the government’sability to seize assets and forbidsnew businesses from issuingbearer shares (previously issuedbearer shares need to be convertedto nominative shares by June2013).
“It is similar to a law enacted inColombia,” explains one attorney.“It enables the executive branchthrough a summary process toliquidate, seize assets. We see it asa positive.”
However, even though the law’smain targets are organised crimesyndicates and money launderers,some voice concern that it mayunduly affect regular businessconduct.
Strategic investors in Hungary arenow looking at their investmentsand debating whether it is worth
staying or engaging in so-calledtransformational transactions toincrease market share. “Exit ordoubling down [gambling on alarger investment],” is the choiceof investors according to onepartner.
Nevertheless, the tide might beturning and firms have observed apickup in M&A activity. “Webelieve that Hungary follows theregional trend with more M&Aand private equity,” says onepartner.
In an M&A market formerlydominated by real estate,confidence is now growing in theenergy, TMT and pharmaceuticalsectors. There have been windfarm and biomass plantacquisitions and firms are seeingpower plant transactions in thepipeline.
A regional trend sees privateequity making a return to themarket. This is also true inHungary, but on a smaller scale,with private equity investing instartup ventures.
Recommended firms
Tier 1
CMS Cameron McKenna
Kajtár Takács Hegymegi-
Barakonyi – Baker & McKenzie
Réczicza White & Case
Siegler Law Office/Weil
Gotshal & Manges
Tier 2
Allen & Overy
Gide Loyrette Nouel
Horváth & Partners DLA Piper
Lakatos Köves & Partners
Nagy és Trócsányi
Szecskay Attorneys at Law
Tier 3
Andrékó Kinstellar
Burai-Kovács & Partners
Erös Ügyvédi Iroda Squire
Sanders & Dempsey
Faludi Wolf Theiss
Oppenheim
Réti Antall & Madl Landwell
Hungary
M&A activity in India has beenfrantic in the last year, with a waveof both inbound and outboundactivity amid dramatic regulatorychanges. Vedanta’s acquisition of astake in Cairn India and theVodafone buyout of Essar’s sharein their joint venture have been
particular standouts in thismarket.
The merger control regulationswere modified in June 2011,which now only requirestransactions of a certain size andmeeting certain thresholds toattain pre-approval from theIndian CompetitionCommission. Some areconcerned about the approvaltime and the delays it might causefor transactions, but the first pre-approval clearance under thisregime had been attained for theReliance - Bharti Axa merger in18 days, so the outlook from themarket remains optimistic.
Changes to the FDI (foreigndirect investment) policy in April2011 have been encouraging forforeign investors. The removal ofPress Note 1 allows foreign jointventure partners to form newpartnerships with domesticentities without needing a no-objection certificate fromprevious partners.
Recommended firms
Tier 1
Amarchand & Mangaldas &
Suresh A Shroff & Co
AZB & Partners
Tier 2
Desai & Diwanji
J Sagar Associates
Khaitan & Co
Luthra & Luthra
Trilegal
Tier 3
Bharucha & Partners
DSK Legal
Kanga & Co
Nishith Desai Associates
Talwar Thakore & Associates
Wadia Ghandy & Co
India
www.iflr.com IFLR/December/January 2012 75
M&A REVIEW
The Indonesian capital marketsexperienced an all-time high at
the end of 2009, prompting theauthorities to take action in 2010.
One resulting endeavour inMay 2010 was to issue a newNegative Investment List in orderto clarify which industries areclosed, and which are closed butopen to limited participation byinvestors. The NegativeInvestment List containsprovisions over which industrysectors in Indonesia foreignentities may invest in and howthey may do it.
When Indonesia passed theAnti-Monopoly Law in 2009 fewanticipated that theimplementation of the regulationwould take years. But in July2010 the government finallypassed the implementingregulation for Articles 28 and 29.The former (Article 28) prohibitsM&A that may result in amonopoly, while the latterrequires post-notification forM&A of a certain size.
Recommended firms
Tier 1
Assegaf Hamzah & Partners
Hadiputranto Hadinoto &
Partners
Hiswara Bunjamin & Tandjung
Melli Darsa & Co
Tier 2
Ali Burdiardjo Nugroho
Reksodiputro
Hendra Soenardi
Lubis Ganie Surowidjojo
Makarim & Taira S
Makes & Partners
MKK - Mochtar Karuwin Komar
Soemadipradja & Taher
Soewito Suhardiman
Eddymurthy Kardono
Tier 3
Bahar & Partners
DNC Advocates At Work
Hanafiah Ponggawa & Partners
Hutabarat Halim Rekan
Kartini Muljadi & Rekan
Indonesia
“The market remains difficult,you have plenty of Italian firmstelling you that the market is greatand they’re doing very well, butthe reality is the market is stillquite difficult,” says one partner.
With good targets still rare,banks squeezing liquidity andprice discrepency between buyersand sellers, the Italian M&Amarket is not in the best health.
“Expectations are still quitehigh from sellers, there’s just notthe same willingness frompurchasers to pay high prices, “says one partner.
“There are assets for sale, butthen purchasers and alsofinancing banks are more selectivein targeting purchases and intargeting companies. This iscreating a selection problemgenerally.”
Where there is plenty of work isin renewable energy whichcontinues to thrive despite thethreat of the government’s feed-in-tariff changes.
Private equity, on the whole isalso looking more healthy, withvarious market participantslooking to divest assets or indeedfind new ones in which to pumpup their funds.
Recommended firms
Tier 1
Bonelli Erede Pappalardo
Chiomenti Studio Legale
Tier 2
Cleary Gottlieb Steen &
Hamilton
Gianni Origoni Grippo &
Partners
Tier 3
Clifford Chance
d’Urso Gatti e Bianchi Studio
Legale Associato
Giliberti Pappalettera
Triscornia e Associati
Grimaldi e Associati
Labruna Mazziotti Segni
Legance
NCTM
Pedersoli e Associati
Italy
76 IFLR/December/January 2012 www.iflr.com
M&A REVIEW
Luxembourg’s M&A market hasbeen sprightlier than its bankingcounterpart, with deals up andrunning.
As ever, internal M&A isinsignificant, with the countrystill primarily engaged withcross-border deals:“Luxembourg is the place forworldwide investments. I wouldsay 90-95% of clients andtransactions are multinational,”says a partner. “We are on acrossroad, a hub for deals.
That’s what we do,” addsanother.
Having said that, thecorporate area is still having toclear up some of the wreckagefrom the crisis, despite newdeals coming up: “The marketis still focussed on somerestructurings. We are seeingsome pure M&A though, withfinancial institutions at thecentre,” comments a corporatepractitioner.
The country has seen avariation of investors. The USand the EU have always beenfrontrunners, but other regionshave been getting involved too.“What we have seen is anincrease in foreign investmentfrom Asia. A Chinese groupbought an Italian bank throughLuxembourg for example,”states one partner, while anotherlawyer remarks on an increase inRussian involvement: “We haveseen an interesting shift in thatthere are more Russian investorsnow, especially in the real estatemarket.”
Recommended firms
Tier 1
Allen & Overy
Arendt & Medernach
Elvinger Hoss & Prussen
Linklaters
Tier 2
Bonn Schmitt Steichen
Tier 3
Clifford Chance
Loyens & Loeff
NautaDutilh
Oostvogels Pfister Feyten
Luxembourg
Mexico’s M&A market appears tohave survived unscathed over thepast year and is booming: “Ourstrong financial system protectedthe M&A market, allowingcompanies to grow in a certainway,” says one partner.
Shutdowns in US and
Canadian automotivemanufacturing plants bolsteredthe Mexican auto industry’spowerful manufacturing base.GM, Ford and Chrysler all havemanufacturing plants in thecountry and Japanese andGerman companies are alsogetting in on the act.
Although the oil and gasindustry is still heavily regulated,some rules are in the process ofbeing relaxed. One of the biggestdevelopments over the past yearwas legislative reform allowingMexico’s state-owned oil andnatural gas company, Pemex,(Petroleos Mexicanos), to enterinto contracts with foreigncompanies. Mexico’s Law onEconomic Competition was alsosigned off, giving the countrymore power to impose sanctionsagainst companies that partake inmonopolistic practices. “This is apositive change,” remarks oneMexican attorney. “We’ve beenworking for several years on this.Now it’s finally law.”
Recommended firms
Tier 1
Creel García-Cuéllar Aiza Y
Enríquez
Galicia Abogados
Mijares Angoitia Cortés y
Fuentes
White & Case
Tier 2
Jáuregui y Navarrete
Kuri Breña Sánchez Ugarte y
Aznar
Ritch Mueller
Santamarina y Steta
Tier 3
Baker & McKenzie
Basham Ringe y Correa
González Calvillo
Jones Day
Mexico
“We thought this would beadversely affected by theearthquake, but it hasn’tdecreased significantly”. This viewfrom one M&A partner summedup the surprisingly optimisticmood found across the market.
Japanese companies haveturned away from domestictargets, but instead of sitting ontheir hands the result has been anincrease in outbound acquisitionsas companies look foropportunities away from theirown shores. “We’ve seenaccelerating acquisitions outsideJapan in Asia, the US and SouthAmerica,” says one partner.Another agrees: “There’s a newgroup of Japan companies,second tier companies that usedto be traditionally orientated butare now looking at cross-borderM&A deals.”
With the instability inherent inthe local market this trend isperhaps not surprising, but it hasalso certainly been helped by the
strength of the yen which hasencouraged Japanese companiesin their endeavours. “A strongeryen is also helping,” says onepartner, adding: “therefore theintention to buy overseas,particularly in the US hasincreased.”
Both the US and SouthAmerica have proved to bepopular targets for corporates butthey have also been casting theireye over closer targets includingthose in developing economies ofcountries such as Vietnam.
The same growthunfortunately has not been seenin the private equity sphere,which was hardly a great well ofactivity before the recent turmoil:“The activity of private equityfirms has been slow since last year;since the earthquake it’s evenworse.”
With the current uncertainty inthe market, it seems unlikely thatactivity will pick up any timesoon.
foreign law
Recommended firms
Tier 1
Davis Polk & Wardwell
Freshfields Bruckhaus
Deringer
Morrison & Foerster
Shearman & Sterling
Simpson Thacher & Bartlett
Tier 2
Allen & Overy
Herbert Smith
Linklaters
Paul Weiss Rifkind Wharton
& Garrison
Skadden Arps Slate Meagher
& Flom
Sullivan & Cromwell
Tier 3
Clifford Chance
Hogan Lovells
Jones Day
Orrick Herrington & Sutcliffe
White & Case
local law
Recommended firms
Tier 1
Mori Hamada & Matsumoto
Nagashima Ohno &
Tsunematsu
Nishimura & Asahi
Tier 2
Anderson Mori & Tomotsune
Baker & McKenzie GJBJ
Linklaters
Morrison & Foerster
Oh-Ebashi LPC & Partners
Skadden Arps Slate Meagher
& Flom
TMI Associates
Tier 3
Allen & Overy
Atsumi & Sakai
City-Yuwa Partners
Clifford Chance
Freshfields Bruckhaus Deringer
Hibiya Park Law Office
Jones Day
O’Melveny & Myers
Paul Hastings Janofsky & Walker
White & Case
Japan
www.iflr.com IFLR/December/January 2012 77
M&A REVIEW
Nigeria has had a tough but activecouple of years. The financialcrisis saw the Central Bank ofNigeria intervene in nine of thecountry’s leading banks and awide restructuring of the bankingsector has ensued.
“The universal banking system
has been abandoned and nowthere are three separate licensesfor retail banking, merchant andinvestment banking, and a licencefor a financial holding company,”says a partner, adding that “therewas also a complete restructuringof banks and their balancesheets”. The aim is to protectretail banking from riskier typesof financial activity.
The M&A market however hasbeen active, with firms registeringa strong year due to therestructuring in the bankingsystem but also thanks to a lot ofmovement in the oil and gassector. There were also a numberof large transactions in the heavyindustries and consumer sectors.In projects, firms point to thehuge shortage in power supplyand a move for privatisation inthe power sector.
Key new legislation include thePetroleum Industry Bill and theaccompanying Local ContentsBill.
Recommended firms
Tier 1
Aluko & Oyebode
Banwo & Ighodalo
G Elias & Co
Olaniwun Ajayi
Templars
Udo Udoma & Belo-Osagie
Tier 2
Abdulai Taiwo & Co
ÆLEX
Adepetun Caxton-Martins
Agbor & Segun (ACAS)
Jackson Etti & Edu
Tier 3
Ajumogobia & Okeke
Giwa-Osagie & Co
Odujinrin & Adefulu
Nigeria
The Netherlands has had arollercoaster ride in M&A. “2010started well, followed by aslowdown in the summer then itended quite well, and the firstquarter of 2011 was extremelybusy,” says a partner. “There has been a tremendousrecovery of the market, not onlyin private equity but also asstrategic moves are back on the
scene... the lending market iseasier, companies are recoveringand, being cash rich, arebeginning to venture out”.
The buzz has been combinedwith caution however: “In duediligence people really want to seenot just the annual figures butalso the figures for the firstquarter too... but it doesn’t meanthey are not doing deals,” says apartner. ‘Optimistic but cautious’very much remains thecatchphrase in the market.
On top of that, banks havebeen cautious with lending, dealsare taking longer to prepare andthe price remains unpredictable.
On the legislative side, there arediscussions (and have been for awhile) for an overhaul ofcorporate laws on BV (limitedcompany). The legislation willmake company structures moreflexible and change the rule onshareholder voting rights, in orderto make the Dutch BV moreattractive to foreign investors.
Recommended firms
Tier 1
Allen & Overy
De Brauw Blackstone
Westbroek
Tier 2
Clifford Chance
Freshfields Bruckhaus
Deringer
Loyens & Loeff
NautaDutilh
Stibbe
Tier 3
Houthoff Buruma
Linklaters
Netherlands
78 IFLR/December/January 2012 www.iflr.com
M&A REVIEW
One of the main drivers oftransactions in Norway this yearhas been the private equity sector,which “has slowly started pickingup again, even though auctionsare more drawn out,” says apartner. “There are somesecondary sales, one privateequity house to another, andindustrial sales.”
Another partner is slightlymore optimistic about privateequity but still discerns a level ofcaution in the way that firmsinvest: “Private equity is nowconsistently working ondivestments and investments,they will buy good projects notjust any project, it is adiscriminating market, not like itwas in 2007.” Another declaresthat “leveraged finance is back,banks doing well and have solidbalance sheets”.
The other main driver in themarket has been industrial M&A,and one of the big highlights wasthe first ever acquisition by aChinese state-owned company(China National Bluestar) of aNorwegian industrial company(Elkem).
“We have seen Chineseinvestments in shipping, solarenergy, IT and telecoms, as well assome investments from India andeven from Singapore,” says apartner.
Recommended firms
Tier 1
BA-HR
Thommessen
Wiersholm
Tier 2
Schjødt
Selmer
Wikborg Rein
Tier 3
Arntzen de Besche
CLP
Haavind
Simonsen
Steenstrup Stordrange
Vogt & Wiig
Norway
Panama enacted a legislativepackage in 2007 that sought toencourage multinationals to basetheir regional headquarters in thecountry through a series of taxincentives, easing licenserequirements, and immigrationreform. Modelled after a similar
initiative in Singapore, thescheme paid quick dividends.Shortly after passage, Proctor &Gamble consolidated its LatinAmerican operations, movinghundreds of families - in additionto its business operations - to thecity. The movement continues to fuelthe present real estate boom,market sources claim.
In addition to the four year-old legislative programme,Panama’s new president hasembarked on an aggressiveinfrastructure building spree.“The economy has been growingstrong because of theinvestments,” one partner says.
Another development sawPanama move onto the OECDwhite list this year. The listhighlights jurisdictions whichmatch international standards fortax and banking transparency,and Panama was granted statusafter signing a double taxationtreaty with France.
Recommended firms
Tier 1
Alemán Cordero Galindo & Lee
Arias Fábrega & Fábrega
Tier 2
Alfaro Ferrer & Ramírez
Galindo Arias y López
Icaza González-Ruiz & Alemán
Morgan & Morgan
Tier 3
Fabrega Molino & Mulino
Patton Moreno & Asvat
Sucre Arias & Reyes
Tier 4
Arosemena Noriega &
Contreras
Tapia Linares & Alfaro
Panama
www.iflr.com IFLR/December/January 2012 79
M&A REVIEW
Undoubtedly, Peru’s headlineevent last year was the closelywatched election of PresidentOllanta Humala. “It’s crazy whathas happened here,” says oneattorney on the eve of theelections. “We’ve had two or three
months where the politicalelections captured everyone’sattention.”
Confident that conservativecandidate Keiko Fujimori wouldwin, many in the legalcommunity believed that businessas usual would resume and theneoliberal policies that guidedPeru’s economic ascendancywould continue. But the electionof former Peruvian PresidentAlberto Fujimori’s daughter wasnot to be, and Peruvian stocksdropped 12.5% after Humaladefeated the conservativecandidate.
Change will likely come as ashock to the steady developmentof Peru’s economic model. “Oneof the strengths of the Peruvianeconomy is how little it changes,”says one partner.
The question now is whetherthe newly appointed leftist willfollow the moderation of Brazil’sLula or the heavy-handedsocialism of Venezuela’s Chavez.
Recommended firms
Tier 1
Estudio Echecopar
Payet Rey Cauvi
Rebaza Alcázar & De Las
Casas
Rodrigo Elias & Medrano
Tier 2
Miranda & Amado
Muñiz Ramírez Pérez-Taiman
& Olaya
Rubio Leguía Normand
Tier 3
Estudio Ferrero Abogados
Hernández & Cía
Delmar Ugarte
Estudio Grau
Estudio Olaechea
García Sayán Abogados
Peru
80 IFLR/December/January 2012 www.iflr.com
M&A REVIEW
There is a buoyancy about theM&A market in Romania. “Wewere hoping to see an increase ofactivity in banking followed byM&A but it happened the otherway around,” says one partner.
However, others offeredqualifications to theirenthusiasm. “The transactionsare small in value. It’s picking upbut it’s not as much as we’dlike,” says a partner.
The small-size dealsdeveloped with the increase inthe number of localentrepreneurs who altered theirexpectations to suit the newmarket conditions. “LocalM&A is very busy and themarket was revamped by tradeactivity,” one partner says.
Of late, there have been anumber of industry sectors thathave been of interest tointernational investors.
“Energy is hot. It’s the mostinteresting with respect toM&A,” says one partner. Therehas been particular interest inrenewable energy, while thepharmaceuticals sector has beensubject to consolidation trends.
Private equity was alsoinvolved in the TMT sector,according to a partner.
Recommended firms
Tier 1
Musat & Asociatii
Nestor Nestor Diculescu
Kingston Peterson
Tuca Zbârcea & Asociatii
Tier 2
Badea Clifford Chance
CMS Cameron McKenna
Popovici Nitu & Asociatii
Salans
Schoenherr si Asociatii
Tier 3
Bulboaca & Asociatii
Gide Loyrette Nouel
Marian Dinu Law Office in
co-operation with DLA Piper
PeliFilip
Radu Taracila Padurari
Retevoescu (RTPR) in
Association with Allen & Overy
Romania
The M&A market in Russia hasbeen the vanguard of the
economy’s recovery, getting backto its feet over the past six, if notthe full twelve months. Partnersare finally starting to feel theyhave turned the corner and all arepositive for the future.
“This time last year I wouldhave said cautiously optimistic -now I would say just plainoptimistic,” says one partner,while another is just as keen:“The M&A market was the firstto recover from crisis really, morestrongly than banking definitely.”
In terms of legislation, there issome debate among corporatelawyers as to the state of the law inRussia at the moment. Some feelthat it is still rather inflexible,while others are insisting it isfinally harmonising with othersystems.
“There is an increasedcomplexity of deals and Russianlaw is too rigid for it. It isunderdeveloped,” says one, whilea peer comments: “A lot ofshareholder agreements were
drafted under English law, usingoffshore holding structures. Nowyou can do this direct in Russianlaw. It is a case of Russian lawcatching up with UK and US law.The law here is definitely moreuser-friendly now.”
The market is also being drivenby oil prices and partners are alsolooking to the mooted stateprivatisation scheme, though witha wary eye. It could provide a lotof work for firms as investors getinvolved from outside, but thereare some potential issues.
“I do have concerns that theprivatisation will go a bit like theold days, with ‘friends’ buying upthese strategic companies andthen selling them on. It’s notexactly transparent,” warns onepartner, while another adds:“There is a lack of transparencyfor these strategic companiesanyway.”
It is also the case that theforeign acquisition of some ofthese stakes will be subject to
government approval, due tothem being deemed ‘strategicenterprises’ by the Russiangovernment. “The thingsconsidered strategic are anythingdefence-related, obviously, butalso natural resources, oil and gasand media – anything potentiallysensitive,” clarifies a partner.
Overall though, one partnerfeels that this federal law will notpresent too much of an obstacle:“It is a complicated process, yes.But I feel it’s fair enough for thegovernment to do this; it takesknow-how to get these things offthe ground, why should all thatwealth be taken out of thecountry? I’m also not sure if thecomplexity will put people offinvesting in these strategicenterprises. The people whowould do this are usuallysophisticated, and can cope withthese kinds of processes.”
Recommended firms
Tier 1
Freshfields Bruckhaus
Deringer
Linklaters
White & Case
Tier 2
Cleary Gottlieb Steen &
Hamilton
Clifford Chance
Herbert Smith
Skadden Arps Slate Meagher
& Flom
Tier 3
Akin Gump Strauss Hauer
& Feld
Allen & Overy
Baker & McKenzie
CMS Russia
Debevoise & Plimpton
Dewey & LeBoeuf
Hogan Lovells
Latham & Watkins
Salans
Russia
The slowing South Koreanmergers and acquisitionslandscape is a concern to thecountry’s financial institutions.This year saw several legislativechanges aiming to facilitatetransactions. However, as apartner at one prominent firmnotes, “there are many M&Adeals beginning, but their successrates are much lower than before”.
Korean financial institutionshave made efforts to assist M&Atransactions, most notably in
March’s revision of the KoreanCommercial Code (KCC). Thenew KCC includes provisions forboth ‘squeeze-out’ and ‘cash-out’acquisitions. In ‘squeeze-out’transactions, a controllingshareholder that owns 95% of acompany can require theremaining 5% to sell their sharesat a fair price.
One lawyer notes that the‘cash-out’ transaction “is a goodalternative to the squeeze-outacquisition”. The buyingcompany is now able to purchaseall the shares of the acquiredcompany in cash, ensuring that itsshareholders have no control overthe new organisation.
The introduction of specialpurpose acquisition companies(Spacs) in late 2010 has alsohelped M&A transactions. AfterDaeshin Securities Spac’ssuccessful acquisition of Ssuntel,the amount of Spacsmushroomed to about 20. Theirpresence will hopefully prop upSouth Korea’s M&A market.
Recommended firms
Tier 1
Bae Kim & Lee
Kim & Chang
Lee & Ko
Yulchon
Tier 2
Jipyong & Jisung
Shin & Kim
Yoon & Yang
Tier 3
Hwang Mok Park
Kim Chang & Lee
South Korea
www.iflr.com IFLR/December/January 2012 81
M&A REVIEW
The Singapore M&A marketremains relatively healthy.Although work is not as buoyantas it was in 2009 heading into2010, there remains a goodpipeline particularly in core areassuch as natural resources andenergy.
In this last area, one of the
year’s largest deals saw investmentvehicle Vallar acquire stakes inBumi Resources and Berau ColaEnergy for $3 billion. TheNathan Rothschild controlledcompany followed this with a$2.1 billion bid for BumiResources Minerals in a move togreatly increase its options and
assets in Indonesia.Practitioners also note the
potential for Indonesiancompanies, particularly in thebooming natural resources sector,to capitalise on the current highlevel of commodity prices, look atpotential targets aroundSoutheast Asia and establishthemselves regionally asdominant players.
Another interestingdevelopment this year has beenthe final ratification of theForeign Practitioner Certificate(FPC) in January 2011. As part ofthe ongoing attempts by theSingaporean government toliberalise the legal market, thenew certificate will allow foreignlawyers to sit the Singaporean barexams, allowing them to practicelocal law.
As in other practice areas, thereis a feeling within the market thatin the short-term at least thisdevelopment will not drasticallychange the landscape withinM&A. Domestic mandates will
continue to be dominated by thelarge local firms, withinternational firms happy toadmit that in most cases it wouldnot be a profitable exercise to goup against them. Instead the realbattleground will be on moreregional cross-border mandates,where international firms withtheir stronger networks and localfirms with their larger teams willgo head to head.
local firms
Recommended firms
Tier 1
Allen & Gledhill
Wong Partnership
Tier 2
Drew & Napier
Rajah & Tann
Shook Lin & Bok
Stamford Law
Tier 3
Colin Ng & Partners
Rodyk & Davidson
foreign firms
Recommended firms
Tier 1
Clifford Chance
Linklaters Allen & Gledhill
Tier 2
Allen & Overy
Latham & Watkins
Milbank Tweed Hadley &
McCloy
Tier 3
Baker & McKenzie Wong &
Leow
Herbert Smith
Hogan Lovells Lee & Lee
Norton Rose
Shearman & Sterling
White & Case
Singapore
“Domesticmandates willcontinue to bedominated bythe large localfirms”
82 IFLR/December/January 2012 www.iflr.com
M&A REVIEW
Switzerland’s M&A marketdisplayed healthiness in the lastyear with a vigorous deal flowand a promising pipeline.“Compared to last year wemight even say that the heat has
turned up a little bit,” onepartner says.
Looking ahead, there areexpectations for progress inconsolidation of the bankingsector.
Nevertheless, while domesticactivity in the form of Swissmidcaps has been stout, therehas in fact been an uptake ininternational activity.
Foreign buyers have madetheir presence felt on themarket and interestingly,commentators observed newbuyers from Asia and theMiddle East.
“Valuations are low. It’s abuyer’s market rather thanseller’s,” one partner says,adding: “There is much moreprotection for the buyer than afew years ago.”
Another interestingobservation saw movement inprivate equity. “Private equityfunds are back to some extent.Auctions have taken place,” onepartner says.
Recommended firms
Tier 1
Baker & McKenzie
Bär & Karrer
Homburger
Lenz & Staehelin
Niederer Kraft & Frey
Tier 2
Pestalozzi
Schellenberg Wittmer
Tier 3
Vischer
Walder Wyss & Partners
Wenger & Vieli
Tier 4
CMS von Erlach Henrici
Meyerlustenberger
Prager Dreifuss
Python & Peter
Switzerland
“Everyone in 2010 thought that2011 would be the year it pickedup,” says a partner, “but it wasn’tthe case. 2011 started out muchslower than expectedconsidering the headlines of` theSwedish economy supposedlybooming, but M&A was notaffected.”
Private equity accounts for alarge proportion of the market -“it has been fuelling growth inSweden in the past decades,”says one lawyer - and many of
the major players such as NordicCapital, EQT, Triton, Altor andBain Capital completed largeacquisitions. The tempo waspicking up in 2011 with somenotable differences to the earlierboom years.
“Buyers are still very cautiousand not being easily drawn intoauction processes and lawyersare being signed up very late inthe cycle,” says one partner. Thesame partner adds that “a lot ofdamaged goods are being put onthe market and it is a reallytough fight to initiate an auctiondeal, a poker game really, withbuyers asking for exclusivityearly in the process”.
The number of participants inthe auctions has also dropped,having the effect of squeezingthe legal market.
“Public M&A has been veryvolatile with perhaps only onein ten finishing,” says a partner.Another adds that he has seenvery contested offers, and hostilebidding.
Recommended firms
Tier 1
Mannheimer Swartling
Vinge
Tier 2
Cederquist
Gernandt & Danielsson
Linklaters
Roschier
White & Case
Tier 3
Hammarskiöld & Co
Hannes Snellman
Sweden
“The main trend is that we have avery difficult transactionalmarket, one of the consequencesof the recession is that financing isnot available as it used to be bybanks because of the situation, asa result the transactional market isquiet with very few deals.”
Of course there are plenty of
wider factors which are alsoblocking the flow of transactions,as one partner says: “The globalpolitical situation affects theSpain market, Japan’s earthquakeand tsunami, war in Libya,questioning of nuclear poweragain.”
What work there has been hasbeen born out of restructuringmandates and distressedacquisitions.
As in so many areas, it is thenewly consolidated savings bankthat are actually producing themost optimism. Investors areturning their attention to thesubstantial assets held by theseinstitutions, which are beingoffloaded as part of the mergerprocess.
“The sources could be portfoliocompanies, minority real estate,which are held by these savingsbanks, they could attractdistressed investors, because thesesaving banks’ are in a painfulfinancial situation,” says onepartner.
Recommended firms
Tier 1
Uría Menéndez
Tier 2
Cuatrecasas Gonçalves
Pereira
Garrigues
Tier 3
Allen & Overy
Ashurst
Clifford Chance
CMS Albiñana & Suárez de
Lezo
Freshfields Bruckhaus
Deringer
Gómez-Acebo & Pombo
Linklaters
Pérez-Llorca
Spain
www.iflr.com IFLR/December/January 2012 83
M&A REVIEW
Turkey’s biggest corporate storythis year is the new commercialcodes that will come into power
officially on July 1 2012. This isa sea change in the legislativelandscape in Turkey andopinion is almost unanimouslyin favour.
“These changes are very, veryimportant. We have neededthese renovations for a longtime... [it] enables investors toget in to Turkey without thehassle of securing a lot ofshareholders,” says one partner,.
Another adds that the “newcodes will bring a high new levelof sophistication to the Turkisheconomy and the law [and] inalmost all aspects it will befacilitating foreign investment.”
Elsewhere, firms arebeginning to see a broader poolof foreign investors, a key aspectof the market.
“We have diversification, withinvestors from China, SouthKorea, the Gulf, CIS(Commonwealth ofIndependent States) and Russiaall involved,” says a lawyer.
Recommended firms
Tier 1
Akol Avukatlik Bürosu
Hergüner Bilgen Özeke
Pekin & Bayar
Verdi & Yazici
Tier 2
Cerrahoglu Law Firm
Esin Law Firm
Özel & Özel
Paksoy
Pekin & Pekin
Taboglu & Demirhan
YükselKarkinKüçük
Tier 3
Balcioglu Selcuk Akman
Bener Law Office
Birsel Law Offices
Çakmak Avukatlik Bürosu
ELIG
Güner Law Office
Ismen Law Firm
Somay Hukuk Bürosu
Turkey
M&A activity in the UK has beenfragile of late. Mirroring the bankmarket, practitioners have seen asituation where good targets arefew and far between, resulting inmany pitched battles over thebest assets particularly with
private equity investors. “Privateequity is back which puts morepressure on strategics to movenow, they are getting morefocused,” says one partner.Another agrees. “Private equity iscoming back and will continue.That will affect the M&Amarket.”
Following the public outcryover the Kraft deal, the UK’sTakeover Panel announced aseries of potential reforms to theTakeover Code in October 2010.The one which garnered the mostattention was the so-called ‘putup or shut up’ stipulationwhereby a potential bidder wouldhave to make their approachformal within 28 days of itscommencement.
While there is a keen desire to,as business secretary Vince Cablesaid: “throw sand in the system”and reduce the image of the UKas a soft jurisdiction for M&A,the reforms are unlikely to changethe landscape dramatically.
Recommended firms
Tier 1
Freshfields Bruckhaus
Deringer
Linklaters
Slaughter and May
Tier 2
Allen & Overy
Clifford Chance
Herbert Smith
Tier 3
Ashurst
Cleary Gottlieb Steen &
Hamilton
Macfarlanes
Skadden Arps Slate Meagher
& Flom
Sullivan & Cromwell
Weil Gotshal & Manges
UK
After a tough period following theeconomic crisis, business isbooming for M&A lawyers.According to a report by deal-tracking firm Dealogic, globalM&A activity hit $1.5 trillion inthe first half of 2011 - up by 22%compared to 2010 levels. “Afterthe financial crisis, non-assistedM&A essentially came to a halt,”says one attorney. “There was aperiod of over a year where therewas no M&A other thandistressed activity.” However,what some in the industry refer toas the dark days are now just ableak memory. “There’s optimismand a lot of activity,” says anotherlawyer. “There’s a lot of availableliquidity, which is a major driverof the M&A market.”
The widespread availability ofcash, helped by corporatedownsizing during the downturn,has resulted in higher askingprices. According to research byStandard & Poor’s, the top 50publicly-traded companies werecollectively sitting on over $1trillion by January 2011. Low
interest rates have createdadditional competition fromprivate equity firms, which canborrow cheaply to financespeculative investments. “Sellershave an inflated idea of what theircompany is worth, and buyersdon’t want to pay it,” says onelawyer. Another remarks, “It’s amatter of waiting out some of thesellers and that’s what people aredoing.”
Relatively high corporateprofits have been another factordriving prices. “There’s the sensethat the proceeds of a lot ofcompanies are high consideringthe recession, so there’s a lot ofrestructuring to the pricingmodels that are out there,” saysone attorney. With good dealsdifficult to find, yesterday’sunderdogs of real estate andtechnology are now prime targetsfor bargain-hunters. However,activity was spread across a varietyof sectors, which M&A lawyersinterpret as a good sign.
Several firms report that dealsare taking longer to complete.
Some buyers are utilising acombination of cash and stock,and transactions are increasinglycross-border propositions. “Thatadds a whole new element,” saysone partner. “You can’t move asquickly because a tender offer isn’tas practical. Also, so manytransactions are multi-national -you end up with questions ofwhere are the shares going totrade, are they going to trade inthe US, what knowledge ofliquidity are they going toprovide?”
Lawyers see market volatility asthe biggest obstacle to doing dealsover the coming year. Upheavalssuch as the nuclear crisis in Japanand uprisings in the Middle Easthave rocked the markets, andwith roadblocks such as the USbudget deficit and European debtahead, attorneys report anincreased focus on due diligence.Additionally, the provisions ofDodd-Frank and other regulatorymeasures have focused manyclients on getting their ownhouses in order.
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