m&a review a matter of perspective - iflr · 2012. 10. 29. · kalo & associates tonucci & partners...

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


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


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


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


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

Tel 00357 22 889 999 Fax 00357 22 889 988 Web: www.tplaw.com.cy


M&A REVIEW

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


Tier 3

CMS Cameron McKenna

Havel Holásek & Partners

Kocian Solc Balastik

PRK Partners

Salans

Weinhold Legal

Czech Republic


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


Hamilton

Darrois Villey Maillot Brochier

Linklaters

Tier 2

Clifford Chance


Deringer

Gide Loyrette Nouel

Sullivan & Cromwell


Willkie Farr & Gallagher

Tier 3

Allen & Overy


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


Deringer

Hengeler Mueller

Tier 2

Clifford Chance

Gleiss Lutz

Linklaters

Tier 3

Allen & Overy

Baker & McKenzie


Hamilton

CMS Hasche Sigle

Hogan Lovells

Latham & Watkins


& Flom

White & Case

Germany

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M&A REVIEW

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.

Recommended firms

Tier 1

Carrillo & Asociados

Consortium – Rodríguez

Archila Castellanos Solares

& Aguilar

Mayora & Mayora

Tier 2

Aguilar Castillo Love

Arenales & Skinner-Klée

Quiñones Ibargüen Luján &

Mata

Tier 3

Arias & Muñoz

Bonilla Montano Toriello &

Barrios

Díaz-Durán & Asociados –

Central Law

Lexincorp

Guatemala

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M&A REVIEW

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


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


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


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



Deringer

Morrison & Foerster

Shearman & Sterling


Tier 2

Allen & Overy

Herbert Smith

Linklaters

Paul Weiss Rifkind Wharton

& Garrison


& 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


& 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


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


Deringer

Loyens & Loeff

NautaDutilh

Stibbe

Tier 3

Houthoff Buruma

Linklaters

Netherlands


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


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


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


Deringer

Linklaters

White & Case

Tier 2


Hamilton

Clifford Chance

Herbert Smith


& Flom

Tier 3

Akin Gump Strauss Hauer

& Feld

Allen & Overy

Baker & McKenzie

CMS Russia


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


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”


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


Deringer

Gómez-Acebo & Pombo

Linklaters

Pérez-Llorca

Spain


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


Deringer

Linklaters

Slaughter and May

Tier 2

Allen & Overy

Clifford Chance

Herbert Smith

Tier 3

Ashurst


Hamilton

Macfarlanes


& Flom

Sullivan & Cromwell


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.

Recommended firms

Tier 1

Cravath Swaine & Moore




& Flom

Sullivan & Cromwell

Wachtell Lipton Rosen & Katz

Tier 2


Hamilton

Latham & Watkins


Tier 3

Cadwalader Wickersham & Taft


Fried Frank Harris Shriver &

Jacobson

Gibson Dunn & Crutcher

Jones Day

Kirkland & Ellis

Paul Weiss Rifkind Wharton

& Garrison

Shearman & Sterling

US

m&a review a matter of perspective - iflr · 2012. 10. 29. · kalo & associates tonucci & partners...

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