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‘A significant loss’: Litigation leaders convene as Google fails in critical €4.1bn antitrust appeal

Google’s parent company, Alphabet, suffered a serious setback this week as the European Union General Court upheld a European Commission antitrust ruling against the company worth €4.125bn.

The case centred on whether Google has used its Android operating system to effectively bar competition. According to the original decision, in 2018 the Android operating system was installed on 80% of all mobile devices in Europe. It stated that Google required developers of mobile devices to pre-install its search engine and browser (Chrome) apps as a pre-condition of receiving a license to use its app store, Play.

While the Court upheld the European Commission’s original 2018 decision, it did marginally revise the fine down from €4.34bn to €4.125bn.

The court stated it: ‘Largely confirms the European Commission’s decision that Google imposed unlawful restrictions on manufacturers of Android mobile devices and mobile network operators to consolidate the dominant position of its search engine.’

The decision will have been keenly observed by the UK’s competition claimant Bar, who, notwithstanding a further Google appeal, will be eyeing lucrative follow-on damages claims. One prominent contentious EU competition partner commented: ‘There is obviously going to be some follow-on action – this decision will encourage it. This is unquestionably a significant loss for Google. They will probably appeal to the European Court of Justice which will delay prospective litigation, but if [the Court doesn’t] overturn it, they should be braced for impact.’

Tom Smith, partner at Geradin Partners and former Competition Markets Authority legal director, added: ‘For arguably the first time, the Court focuses on the way in which a big tech firm uses its ecosystems to insulate itself from competition. It also dismisses Google’s paternalistic arguments that it needs to be in control of everything that happens in its wider ecosystem, and it endorses the Commission’s findings on a status quo bias whereby users tend to stick with the app that is pre-installed. These aspects will be really helpful for the Commission and claimants in future cases.’

In a statement, Google said: ‘We are disappointed that the Court did not annul the decision in full. Android has created more choice for everyone, not less, and supports thousands of successful businesses in Europe and around the world.’

Google fielded an impressive legal line-up, with a team that included Cleary EU antitrust partner Nicholas Levy. He was joined by Allen & Overy partner and co-head of antitrust Jürgen Schindler, Garrigues EU and competition partner Alfonso Lamadrid de Pablo and White & Case competition partners James Killick, Assimakis Komninos and Genevra Forwood.

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Deal Watch: activity powers on as Latham and A&O lead on $19bn energy joint venture

Despite the inevitable slowdown in the spring following Russia’s invasion of Ukraine, deal activity rebounded over the summer with an unusually busy August. Latham & Watkins, Kirkland & Ellis and the magic circle were among the firms taking the lead on billion-pound private equity, energy and tech deals.

Latham advised EIG on its $4.8bn acquisition of a 25% stake in Repsol Upstream, a newly formed global exploration and production company comprising the entire global upstream oil and gas business of Spanish energy company Repsol.

London corporate partners Sam Newhouse and Simon Tysoe, and London associate George Venables led the Latham team that included London associates Emily Smith and Saavan Shah, and Madrid associates Marta Portuondo and Carmen Esteban.

Repsol instructed an Allen & Overy (A&O) team led by Madrid partners Iñigo del Val, Ignacio Ruiz-Camara and Tom Wilkinson, and London partner John Geraghty.

Tysoe told Legal Business: ‘It’s a great opportunity for Repsol to monetise its existing upstream assets and be able to prioritise the cash for the development of non-oil and gas energy in its portfolio. At the same time, EIG has a great track record of optimising the performance of portfolios, bringing cutting-edge, ESG-focused techniques to them and successfully getting them to a point where it can exit, such as through an IPO. It is a great combination of talents and shows there are still really good opportunities out there for private investment in oil and gas on a big scale.’

Staying on the theme of ESG, Macfarlanes and Sidley landed roles on MetLife Investment Management’s acquisition of specialist ESG investment manager Affirmative Investment Management (AIM).

Macfarlanes’ Tim Redman, who acted for AIM on its strategic investment from Sumitomo Mitsui in 2020, led on the sale. He noted: ‘We’re seeing ESG as an increased focus for all of our clients, regardless of what sector they are operating in, and this is a great example of a global institution strengthening their offering. In this case MetLife will be doing so by combining AIM’s expertise in ESG with its existing commitment to sustainable investing.’

Redman was assisted by corporate and M&A associate Luis Soares de Sousa, while senior counsel Sarah Shucksmith and associate Beth Leggate advised on tax aspects. MetLife instructed a Sidley team led by partners Jonathan Kelly, James Wood and Eleanor Shanks.

Elsewhere, Simpson Thacher, Kirkland and Eversheds Sutherland advised on Oakley Capital’s £1bn acquisition of testing, inspection, certification and compliance sector company Phenna Group.

Eversheds global corporate co-head Richard Moulton led on the matter for Phenna and said: ‘The business has grown significantly with Inflexion’s ownership and support. With a lot of acquisitions around the globe, it has been turned into a truly global testing, inspection and certification business. For Inflexion, it is a significant sale as the company has attained a value of over a billion under its stewardship, meaning a 5.5 times return on its money.

‘What we are seeing is that for very good assets – and this is one of them – there’s still appetite to invest with plenty of liquidity and private equity dry powder in the market. There has, however, been broader caution in the PE market, certainly across consumer-facing sectors.’

Moulton was assisted by tax and banking partners Colin Askew and Christopher Akinrele, principal associates Russell Naglis in corporate and Charlie Markillie in competition as well as tax senior associate Matthew Cummings and corporate associates Megan Irons and Philip Smith.

On the buy side, Simpson Thacher’s corporate partners James Howe and Ben Spiers led the M&A team, which included associates Chris Vallance, Jenny Leung, Nishita Vasan, Alex Ward, Jewel Zhu, Beanka Chiang and Oliver Heighton. Funds partners Jason Glover and Robert Lee; antitrust partner Étienne Renaudeau; Washington DC-based national security regulatory practice head Mick Tuesley, and head of UK tax Yash Rupal also advised.

A Kirkland team led by debt finance partners Neel Sachdev and Kanesh Balasubramaniam advised Oakley Capital on banking aspects. On tax matters, partners Peter Abbott and Gal Shemer assisted.

Meanwhile, Cleary Gottlieb and Jones Day acted on Macquarie’s €2.4bn acquisition of Vigie’s (formerly Suez) UK waste business from Veolia Environnement. The transaction was part of an antitrust divestment program following the 2021 merger of Veolia and Vigie.

A Cleary team led by partners Pierre-Yves Chabert in Paris and Nallini Puri in London represented Veolia Environnement on the sale. Also in London, partners Jackie Holland and Paul Gilbert, senior attorney John Messent and associates Courtney Olden and Fay Davies advised on competition aspects. Jones Day’s Vica Irani and Ben Larkin led on the acquisition for Macquarie.

Finally, A&O and Cleary are advising Canadian software company OpenText on its $6bn offer for Micro Focus, the UK-based enterprise software provider. Partners Seth Jones and Annabelle Croker are leading for A&O, while Cleary’s M&A team includes Jim Langston, Chris Moore, Dan Tierney, Andrew Wood and Sam Connor.

For Microfocus, a Slaughter and May team is being led by partners Paul Dickson, Harry Hecht and David Johnson, and includes associates Warwick Brennand, Thomas Fletcher, Thomas Whitney, Matthew Atkinson and Emily Galvin.

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Dealwatch: Ashurst and Travers double up on McColl’s and Ideagen acquisitions as Freshfields energises offshore wind deal

A trio of City firms acted on the sale out of insolvency of McColl’s to supermarket chain Morrisons, in a week that also saw significant mandates in the renewable energy and software sectors.

The transaction, which was structured as a pre-pack sale following the initiation of administration proceedings by McColl’s board on 6 May, ensured all employees would avoid redundancy, while also protecting all pension schemes.

Convenience store and newsagent operator McColl’s maintained roughly 1,200 sites across the UK, employing some 16,000 people.

Travers Smith represented McColl’s. Restructuring and insolvency head Edward Smith and corporate lead Andrew Gillen headed up the team which also included associates Kirsty Emery and Fabian McNeilly.

Morrisons was advised by Ashurst, with the team led by longtime adviser Tom Mercer and restructuring partner Olga Galazoula in addition to Giles Boothman and Inga West. The firm also provided a comprehensive service through a cross-practice team of partners; Nigel Parr (competition), Lynn Dunne (contentious restructuring and insolvency), Ruth Buchanan (employment), Tim Rennie (global loans), Sarah Sivyour (real estate), Nicholas Gardner and Paul Miller (tax) were all involved in the deal.

The transaction is the second high-profile acquisition in which the firm has represented Morrisons in the past year, having also acted for the supermarket chain in its £7.3bn takeover by Clayton, Dubilier & Rice in October 2021.

PwC instructed Hogan Lovells to represent it as joint administrator of seven companies within the McColl’s group. Insolvency duo Debbie Gregory and James Maltby led the team, which also included Oliver Humphrey, Oliver Chamberlain, Katie Banks, Stefan Martin, Tom Brassington and Angus Coulter, who advised on litigation, real estate, pensions, employment, corporate and competition expertise respectively.

Gregory commented: ‘This is a fantastic outcome for McColl’s and all its stakeholders and we are pleased to have played our part in securing a rescue for this neighbourhood retailer which has been part of communities across the UK for over 100 years.’

Travers and Ashurst were also instructed on the £1.06bn purchase of Ideagen plc by Rainforest Bidco Limited, a company indirectly controlled by funds managed by Hg Pooled Management Limited (Hg).

Ideagen has a strong foothold in the regulatory and compliance software space, operating across the life sciences, finance, insurance and health sectors. With offices in London, Munich and New York, Hg has over 20 years’ experience of investing in the software industry.

The Travers team that advised Ideagen was led by corporate partner Richard Spedding. Head of incentives and renumeration Mahesh Varia also acted on the deal, as did competition lead Nigel Seay. The transaction builds on the firm’s relationship with the company after it first advised on a £103.5m fundraise in December 2021.

Linklaters represented Hg. Corporate duo Chris Boycott and Alex Woodward headed up the deal team, which also included fellow partners Bradley Richardson, Neil Hoolihan and Oliver Sceales, who respectively advised on employment, antitrust and debt financing.

Lazard and Houlihan Lokey, which are acting as financial advisers to Ideagen, were represented by Ashurst. Karen Davies and Tim Rennie led the transaction.

Finally, Global Infrastructure Partners (GIP) has acquired wpd offshore, the offshore wind arm of wpd AG. Active in 14 European and Asia Pacific markets, the target company has an extensive portfolio of offshore wind projects which includes a development pipeline of roughly 30GW, with 7GW developed so far.

The cross-office Freshfields team which advised GIP was led by Natascha Doll (Hamburg) and Patrick Ko (London), assisted by Richard Lister (London) and Torsten Schreier (Frankfurt). Michael Josenhans (Frankfurt) and Pascal Cuche (Paris) provided finance expertise; David Beutal (Munich) advised on tax matters; Paul van den Berg (Amsterdam) and Martin J. McElwee (London/Brussels) led on antitrust; employment issues were handled by Boris Dzida, Klaus-Stefan Hohenstatt (both Hamburg) and Christel Cacioppo (Paris); and Michael Ramb (Düsseldorf/Berlin) assisted with environment, planning and regulatory.

Wpd was represented by Bremen-based renewables specialists Blanke Meier Evers. Thomas Heineke and Jochen Rotstegge led on the deal with assistance from Rainer Heidorn and Andreas Hinsch.

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Dealwatch: City players drill down on Siccar Point Energy sale as US elite act on IFS and WorkWave deal

Significant deals in the pharmaceutical, energy and software space have got the market talking over the last week, as City and US giants scored major mandates.

Ithaca Energy is acquiring Siccar Point Energy, best known for operating the Cambo oil and gas field in the North Sea, for $1.5bn. The buyer will pay $1.1bn up front, with the potential for $360m of additional payments dependent on future developments and commodity prices.

The transaction is intended to increase Ithaca’s daily production levels ahead of its IPO, penciled in for later in the year. The takeover is expected to boost Ithaca’s production by up to 9,500 barrels of oil equivalent per day.

Freshfields Bruckhaus Deringer advised Siccar Point as the seller, as well as its sponsors, Blackstone Energy Partners and Blue Water Energy. Partners James Scott and Graham Watson led the deal team alongside partner-elect Alon Gordon.

Ithaca Energy was represented by Pinsent Masons. Global oil & gas head Rosalie Chadwick led a cross-practice team that also included partners Michael Smith and Giles Warrington. The acquisition is the latest in a string of deals the firm has handled for the company in recent years, having also worked on its $2bn acquisition of Chevron North Sea Limited.

Elsewhere, a collection of Global London firms advised on Hg’s investment in IFS and WorkWave. The transaction, which saw the New York-bred private equity house become a significant minority shareholder, values IFS and WorkWave at $10bn. EQT remains the majority shareholder.

Headquartered in Sweden, IFS produces cloud software programmes relating to the distribution of goods, while WorkWave’s suite of products provide cloud-based software solutions to businesses.

Latham & Watkins advised TA Associates as the seller. London corporate partner Paul Dolman led the deal team, while Nicola Higgs provided regulatory advice.

Hg was represented by Skadden, with London duo Richard Youle and Katja Butler leading the team.

IFS and its shareholders, including EQT, were advised by an international team from White & Case. Led from Stockholm by Patrik Erblad, the deal team included partners from the London, Frankfurt, Düsseldorf, Brussels and Luxembourg offices. Kirkland & Ellis, led by partners Roger Johnson and Aneeq Durrani, assisted WorkWave.

Speaking to Legal Business Erblad said: ‘We were acting as advisers to the company and its shareholders, including EQT, Skadden was advising Hg on the buyer side. We also had Latham advising TA. So, it was a lot of US firms. I think that’s really what was required; for everyone to come together to get this deal done to a tight timetable.

‘What we have seen in the last month is that software and tech has been very hot. There is a lot of interest around the real quality assets. The companies that show consistent growth and are delivering profit are in high demand among private equity companies.’

Finally, Allen & Overy, Latham & Watkins and Linklaters acted on the $1.2bn acquisition of Theramex by private equity giants PAI Partners and Carlyle from CVC.

Initially created through a carve out of a group of women’s health pharmaceuticals, Theramex has grown into a premier pharmaceutical company specialising in women’s health.

Linklaters advised Carlyle and PAI Partners as acquirers. Private equity partners Alex Woodward and Chris Boycott led the deal team, which also included tax counsel Jamie Coomber, employment specialist Sinead Casey, IP lawyer Yohan Liyanage and TMT partner Marly Didizian. Adam Zecharia and Robin Harvey spearheaded a team from A&O that handled the financing aspects.

CVC Capital Partners and Theramex were represented by Latham, which also advised on the formation of the original Theramex Group in 2018. London duo Robbie McLaren and Linzi Thomas led on the corporate aspects of the deal, while Gail Crawford Fergus O’Domhnaill handled tech and finance respectively. Eveline Van Keymeulen provided regulatory advice from Paris.

Taylor Wessing advised the Theramex management team. Head of private equity Emma Danks was the lead partner.

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‘Buffeted from both sides’: City partners react as Clyde & Co and BLM finalise merger

With partners from Clyde & Co and BLM recently voting through their £700m merger, observers have offered conflicting views on what the tie-up means for the market.

Legal Business broke the news on 18 March that a partnership vote was imminent, and Clyde confirmed on 28 March that the vote had passed, with the combination to go live in July 2022.

In terms of the key stats, the merged firm, which will still be known as Clyde & Co, will comfortably break £700m in combined revenues, have an overall headcount of 5,000, and boast offices in more than 60 cities worldwide. As for fee-earners, post-merger, the firm will have around 2,600 lawyers and close to 500 equity partners.

A statement made it clear that the tie-up is an insurance play, which is no surprise. Clyde & Co has historically been strong in advisory and contentious insurance work, and BLM has a market-leading niche casualty insurance practice. The statement read: ‘The majority of [BLM’s] lawyers will join [Clyde & Co’s] casualty insurance practice, with other sizable groups joining the professional liability, healthcare and business advisory teams.’

James Cooper, partner and chair of the firm’s global insurance practice group, said: ‘We have long sought to increase the scale of our UK casualty insurance practice though a merger so we can provide the full scope of services, technology, data analytics and innovation that clients in this dynamic part of the market require. Once we started speaking to BLM, we quickly realised that we shared the same approach to client service, had a complementary client roster and similar ambitions in this space.

‘This combination will also boost our regional UK presence and strengthen our healthcare and professional liability offerings too.’ On the office front, the tie-up adds new outposts in Birmingham, Liverpool and Southampton to Clyde & Co’s UK coverage.

The move did not shock insurance partners at rival firms, with the tie-up having featured in market chatter for close to a year. Generally, the merger has been well-received, and viewed as symptomatic of a consolidating insurance market that has refined legal services to a binary between high-end advisory work and high-volume claims work. Typically, Clyde has embodied the former while BLM’s casualty practice fits into the latter.

A recent example, in January 2021 Kennedys opened in Leeds via the takeover of Langleys’ insurance team. The move gave Kennedys coverage in high-volume aspects of insurance, such as motor liability matters and a practice that provides pre-litigated claims handling services to insurers and self-retained corporations.

Richard Leedham, a litigation partner at Mishcon de Reya with extensive experience in the insurance market, told Legal Business: ‘We see consolidation on the defence side all the time, this is just the latest iteration of what firms such as Clyde and Kennedys have been doing. The merger doesn’t surprise me at all – it is likely driven by rates, economies of scale and keeping prices down for their insurer clients.’

Zulon Begum, a partnership law partner and specialist in law firm mergers at CM Murray, added: ‘Coming out of Covid, we are getting lots of enquiries from firms looking to merge or seek external investment. I predict there is going to be lots of activity this year in terms of mergers and IPOs.

‘It’s always the mid-market that you fear for, being buffeted from both sides by the big firms and boutiques. Then you have the likes of the Big Four accountancy firms, which can leverage their multidisciplinary experience and take work from the mid-market – they’re not going to compete with the likes of Slaughter and May and Linklaters, they’re going after the mid-market firms that don’t have the same brand power.’

However, a litigation partner at a leading insurance firm suggested the consolidation trend is phasing out: ‘I don’t sense there is a huge client push for further consolidation. Procurement has a heavy influence of course, but their sole objective is not necessarily to reduce panel sizes. They still need access to the right legal expertise and too few panel firms leaves them with conflict issues and, in the end, having to appoint more firms off panel.’

The merger is Clyde & Co’s biggest in terms of revenue and headcount since it merged with Barlow Lyde & Gilbert in 2011, which was the largest-ever merger of two UK law firms at the time. Since then, Clyde’s recent history has been peppered with tie-ups. In October 2015 it merged with Scottish residential property specialist Simpson & Marwick, adding 45 partners in the process. The following year, a combination was agreed in Sydney with Lee & Lyons, adding five partners and over 25 lawyers. In 2018, 15 partners and 65 other lawyers and staff were brought in via a merger with California firm Sedgwick, and in July last year, Clyde combined with Vancouver-based SHK Law Corporation, which brought six partners and 18 lawyers in total.

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Paul Hastings toasts quarter century in London with 41% City revenue surge

In what the firm is hailing as ‘its best financial year ever’, Paul Hastings has posted an eye-catching 41% growth in City turnover from £108.6m to £157.2m.

Globally, Paul Hastings did not fare much worse, with worldwide turnover jumping 20% from $1.31bn to $1.57bn. This was accompanied by a 21% hike in profit per partner (PPP), which grew from $3.9m to $4.7m.

The PPP rise was matched by modest increases in overall partner headcounts, emphasising the organic nature of growth: equity partner numbers dipped slightly from 179 to 177 while the number of non-equity partners grew from 90 to 96.

It is a return to form for the typically upwardly mobile Paul Hastings, after a more muted year in 2021 which saw both global and London revenues remain broadly flat.

However, the latest London result outpaces even growth at Latham & Watkins, which increased its City turnover by 30%.

London chair and tax partner Arun Birla (pictured) told Legal Business: ‘It’s been a great team effort, no one person can take all the credit! It’s down to our fantastic clients, business professionals and attorneys. Clients have trusted us while they’ve been on a rollercoaster ride for the last couple of years, and that’s thanks to our amazing client service.’

Paul Hastings has added some high-profile lateral partners in the last year, with the three-partner white-collar team of Jonathan Pickworth, Joanna Dimmock and Rebecca Copcutt arriving from White & Case being a highlight. The firm also picked up leveraged finance partner Adrian Chiodo from Latham, litigation partner Alex Leitch from Covington & Burling, private investment funds partner Ted Craig from Dentons and securities and capital markets partner Max Kirchner from Proskauer Rose.

The firm claims its collateralised loan obligations (CLO) team, headed by partner Cameron Saylor, currently enjoys a 50% share of the European market after tripling its revenues in the last three years. The firm said: ‘The team is innovating and leading in the area of ESG as it relates to the CLO market and our work advising responsAbility, the international sustainable investment house, in relation to an innovative and novel social bond is a great example of this.’

Birla highlighted the firm’s global finance practice as another key differentiator: ‘We’ve built up a very strong position on both sides of the Atlantic. We are unique in covering a range of areas, such as structured finance, structured credit, high-yield and capital markets in the key jurisdictions.’

There were also standout mandates in the core areas of M&A and litigation. On the transactional side, Paul Hastings represented Moody Corporation on its $2bn buyout of RMS, a global provider of climate and natural disaster risk modeling and analytics, from Daily Mail and General Trust plc.

On the contentious front, the firm represented Ziad Akle, the lead defendant in the high-profile Unaoil trial, the SFO’s largest bribery trial to date. Akle’s convictions were quashed before the Court of Appeal in December 2021.

On whether such growth was sustainable in the long run given the turbulent global situation, Birla concluded: ‘That’s the million-pound question! The thing about Paul Hastings is that we are a resilient law firm. Whether it’s boom or bust we will always strive to be up there amongst the best, providing excellent client service.’

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Dealwatch: Simpson Thacher and Kirkland lead on EQT’s €6.8bn BPEA deal as Freshfields and HSF jump aboard Stagecoach offer

EQT’s €6.8bn acquisition of Baring Private Equity Asia (BPEA), Cinven’s $2.6bn buyout of BESP and Pan-European Infrastructure III’s (PEIF III) £595m cash offer for Stagecoach Group Plc have kept advisers busy in recent days, as private equity deals continue to drive the M&A market.

Stockholm-headquartered EQT reached an agreement to buy Baring Private Equity Asia (BPEA) for €6.8bn. The consideration includes 191.2 million new ordinary EQT shares, valued at €5.3bn, and €1.5bn in cash.

BPEA is a private market investment company operating across Asia, with over €17bn of assets under management. The transaction signifies a major advance for EQT’s strategy in the region, providing the business with the opportunity to target the Asian private markets.

Simpson Thacher represented BPEA, with partners Ben Spiers and Elizabeth Cooper leading the cross-practice group from London and New York respectively. Paul Weiss also advised the target company: partners Ariel Deckelbaum, Adam Wollstein and Marco Masotti were the corporate leads; partner David Mayo advised on tax matters, and partner Andrew Gaines acted on executive compensation issues.

EQT was represented by Kirkland & Ellis. The deal team was led from London by corporate partners Roger Johnson, Greg Scott and Adrian Duncan. Investment funds advice was provided by partners Erica Berthou, Richard Robinson and Amy Fox; partners Sally Evans and Philipp Gnatzy handled antitrust; and partners Alpa Patel, Mark Staley and Prem Mohan advised on financial regulatory issues.

Elsewhere, London private equity house Cinven has announced its agreement with pharmaceutical juggernaut Bayer AG to acquire its Environmental Science Professional (BESP) Business for a total enterprise value of $2.6bn.

The takeover of the US business is a geographical expansion on Cinven’s recent form for investing in carve-outs from continental companies, particularly in the DACH region, comprising Germany, Austria and Switzerland.

Headquartered in North Carolina, BESP is a global player in pest control, with around 800 employees and sales in over 100 countries. The company also has a strong ESG focus, given its strategy of providing products that manage pests in a sustainable and responsible way.

A cross-office team at Clifford Chance represented Cinven. Corporate and private equity advice was provided by partners Jörg Rhiel (Frankfurt), Anselm Raddatz (Düsseldorf), Jonny Myers (London) and Kevin Lehpamer (New York). London partners Michael Dakin and Taner Hassan provided capital markets and finance advice alongside partner Daniel Winick in New York.

Commenting on the transaction, Rhiel said: ‘This exciting transaction among global leaders of their respective businesses comprised a complex carve-out across several jurisdictions. The deal required a mix of transactional, regulatory and commercial legal expertise, which we were happy to effectively provide to our client Cinven.’

German firm Hengeler Mueller acted for Bayer in the transaction, with Düsseldorf partners Mattias Hentzen and Martin Ulbrich leading the team that provided corporate, employment, IP antitrust, tax and regulatory advice.

Finally, Freshfields Bruckhaus Deringer and Herbert Smith Freehills (HSF) advised on Pan-European Infrastructure III’s (PEIF III) £595m cash offer for Stagecoach Group Plc, anticipated to close in the next couple of months.

Following the offer, Stagecoach directors have withdrawn their support for the merger with National Express announced late last year.

PEIF III, a fund manged by The DWS Group, was advised by Freshfields. Partners Piers Prichard Jones and Kate Cooper led the corporate work, while partner Dawn Heath provided pensions expertise.

HSF represented Stagecoach, having worked with the company for over 25 years. London corporate partners Ben Ward and Robert Moore spearheaded the deal team, which also provided competition, regulatory, trade, pensions incentives and employment advice.

Speaking to Legal Business, Ward said: ‘The initial business combination transaction with National Express, which was announced back in December, was an industry consolidation that the company’s board was able to recommend to its shareholders. The announcement triggered interest from other parties, and ultimately the board considered the all-cash offer from DWS to be a better proposition for shareholders than the share for share combination with National Express.

‘The UK bus sector may not always be considered the most exciting of industries, but this deal for Stagecoach could ignite further interest in the sector. The UK government is very committed to bus transport infrastructure, as it is a tried and tested system that is also cost effective. There is still the issue of the transition to cleaner energy to consider, but the return on investment should be there for investors with a medium or long-term outlook.’

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Latham becomes the first $5bn law firm club member as revenue soars 27%

Latham & Watkins has become the first law firm to break the $5bn revenue barrier as turnover spiked 26.7% to $5.489bn in the 2021/22 financial year.

Profit per partner also saw a comparable 26% surge to $5.71m from $4.52 last year.

The figures released on 21 March easily eclipsed last year’s still impressive results, which saw turnover increase 15% to $4.33bn from $3.768. Global lawyer headcount has also seen a notable increase, rising by 8% to 3,078, while revenue per lawyer grew 18% from $1.52m to $1.78m.

Global chair Rich Trobman hailed the results as a vindication of the firm’s overarching strategy: ‘2021 was another successful year for the firm and we are pleased with our strong performance and achievements. Our long-term vision, deep and diversified platform, and commitment to client service helped grow demand for our legal services across practices and markets. We combined our worldwide resources with the best talent, sector knowledge, and experience to drive positive outcomes for our clients across all industries.

‘I am particularly proud of the resilience and hard work of our people and how we have supported one another throughout the year, all the while staying focused on our clients and their evolving needs. Looking ahead, we will continue to invest in our global platform, execute on our strategy, and deliver great client service.’

The firm does not habitually release regional profit breakdowns, but the London office is understood to have posted a 30% jump in revenue, which would take the office’s top line to around $700m, further enhancing its reputation as one of the most potent foreign practices in the high-end UK legal market. Such a figure would comfortably outstrip last year’s estimation, which suggested a 20% increase up to around $540m.

There has been no shortage of investment in London either –seven lateral hires have been recruited over the course of the year. The majority of these came in the finance, capital markets and corporate groups, including Bruce Bell (restructuring, Linklaters), Paul Dolman (PE, Travers Smith), Thomas Bartlett (project finance, White & Case), Alex Martin (structured finance, Weil, Gostshal & Manges) and Shawn Anderson (capital markets, Kirkland). Elsewhere, James Lloyd (Orrick) and Helen Lethaby (Freshfields) joined the data privacy and tax groups respectively.

In addition to lateral hires, the firm is increasing its commitment to internal growth in the city. Nine London associates were part of the 2022 partner promotion round, five of whom have spent their whole career at firm.

On the transactional side, M&A, capital markets banking all recorded double-digit growth, as did the emerging companies practice and public company practices. Disputes, general litigation, antitrust, IP, securities and professional liability were similarly bullish.

The key sectors driving activity were reflective of the market more generally. Technology, healthcare and life science and energy were all up compared to last year, as were financial institutions, retail and media.

Latham’s numbers have been released amid anticipation that long-time rival Kirkland & Ellis will also surpass the $5bn revenue mark in the coming weeks.

The rivals routinely battle for top spot among the global elite, with Kirkland last year striding out in front by around $500m.

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Clyde & Co and BLM to merge with partner vote imminent

Clyde & Co and BLM are at an advanced stage of merger discussions, with both sets of partnerships due to vote on a tie-up before the end of March.

Legal Business understands that there is significant confidence that the deal will be green-lit.

According to the latest available LB100 data, the merger would create a £736m turnover firm with a combined headcount of over 2,500 lawyers and in excess of 450 equity partners.

It is understood that the merged entity will be known simply as ‘Clyde & Co’, a reflection of the respective sizes of the two firms. Clydes constitutes £640m of the combined revenue and 1,966 lawyers on its own. There are still details to be ironed out, particularly in relation to a combined leadership structure and what kind of roles BLM’s current managing and senior partners, Vivienne Williams and Matthew Harrington respectively, will be offered.

The combination has been in the offing since late 2019, when Clydes approached BLM and mooted a tie-up. It is a naturally attractive proposition for BLM, as one of many firms feeling the consolidation squeeze in the lower mid-market. In 2017, the firm slashed a considerable number of support staff as part of a wider restructuring effort.

Merger talks stalled as a result of the pandemic, before RollOnFriday broke the news in October 2021 that the two firms were in preliminary discussions.

There are obvious synergies between the two firms, with crossovers in areas such as insurance and professional indemnity. However, BLM will also bring Clydes access to established niche practices in casualty insurance and healthcare. Reflecting that strength, BLM has historically featured on NHS legal advice panels.

Neither firm is a stranger to mergers: In 2011 Clyde & Co combined with Barlow Lyde & Gilbert in a major deal, while BLM was born out of a merger between Berrymans and Lace Mawer. Prior to the Barlow tie-up, Clyde had scant regional UK coverage, but a BLM merger would extend its reach to new outposts in Birmingham, Liverpool and Southampton.

A Clydes spokesperson said: ‘We can confirm that Clyde & Co is in discussions about a merger with BLM. As the world’s leading insurance law firm, we are always looking to grow for the benefit of our clients. We have long sought to significantly increase the scale of our casualty insurance practice in the UK so that we can provide the full scope of services, technology, data analytics and innovation that clients in this dynamic part of the insurance market require.

‘We consider a merger such as this the best way to realise these ambitions. BLM is a firm we have long admired and we believe a merger can be formed on the basis of our complementary client rosters and our shared focus on quality.

‘As this merger is not yet finalised it would be inappropriate to comment further at this stage.’

A BLM spokesperson added: ‘Following detailed discussions and a period of due diligence, BLM and Clyde & Co partners will vote on a proposed merger of the two organisations. The Executive Board set strategic objectives around how best to grow the firm and secure our status as a market leading, innovative and full-service law firm across the UK, Ireland and internationally. We believe that a potential combination with Clyde & Co would provide us with the growth needed to develop our business.

‘The result of the vote will depend on whether, in the respective partner group’s view, combining the firms is in the best interests of our colleagues, clients and the wider businesses.

‘The strategic and commercial compatibility of the two firms is undeniable. We are both dominant in risk and insurance and our respective businesses complement each other. Whilst Clyde & Co is a global business, we both have an extremely strong presence in the insurance sector in the UK and Ireland. Clyde & Co also boasts a strong offering in business and advisory services.

‘More details will be provided as soon as the vote has taken place.’

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This story first appeared on Legal Business

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Dentons, DLA and Bakers to sever ties with Russia offices as A&O and CC wind down

Baker McKenzie, DLA Piper and Dentons have taken a different course to most international law firms, separating from their Russia practices and leaving independent firms behind, rather than closing the offices entirely as a response to Russia’s continued invasion of Ukraine.

All three firms operate under a Swiss verein structure, which enables the different offices to maintain financial and regulatory independence from one another and allows for quick mergers and demergers.

Dentons announced its intentions on Monday (14 March). The Moscow and St Petersburg offices, which collectively employ over 250 people, will ‘operate as an independent law firm’, according to the firm’s latest statement.

‘This is a difficult decision which we have taken in full consultation with our colleagues in Russia in order to continue meeting our legal and ethical obligations’, said Elliott Portnoy, global chief exec of Dentons. ‘Our hope is that at a future time we will be able to come back together when it is lawfully and practically possible to do so.’

In a statement also issued on Monday, DLA said: ‘In light of Russia’s actions in Ukraine and the resulting humanitarian crisis, and our consequent decision not to act for clients connected to the Russian state, we have concluded that maintaining a presence in Russia is not aligned with our values and therefore no longer viable.

‘Accordingly, after 17 years in the country, we are withdrawing from our operations and will no longer have DLA Piper offices in Moscow and St Petersburg. Our intention is to transfer the Russian business to our team there. We will ensure an orderly transition in accordance with our legal and professional obligations to both our clients and our people.’

Baker McKenzie, which in 2004 was the first major firm to become a Swiss verein, followed suit on Tuesday (15 March), stating: ‘After 33 years operating in the country, Baker McKenzie’s current Russia operations, across both Moscow and St Petersburg, will become an independent law firm.

‘We have made this difficult decision following ongoing consultation with our multinational clients, whose urgent on-the-ground legal needs we are serving, as well as careful consideration of the wellbeing of our many people in the wider region.’

Elsewhere, Clifford Chance and A&O followed the lead of magic circle peers Freshfields Bruckhaus Deringer and Linklaters in announcing their intention to close their Moscow offices.

CC, which houses 33 lawyers in Moscow according to its website, said in a statement last Thursday (10 March): ‘Following our earlier announcements condemning the Russian invasion of Ukraine and our position on Russia related work, we have decided to progress our steps for an orderly wind down of our operations in Moscow.

‘Our priorities are to focus on the safety and wellbeing of our colleagues during this difficult time and on ensuring the winding down of our services is consistent with our legal and professional responsibilities to our clients and our responsible business principles and values.’

Also on Thursday, A&O confirmed that it ‘is to wind down its Moscow office, which will be managed in line with all legal, regulatory and professional obligations. This was not an easy decision to make as we have 55 people there and we needed to make sure that we could take this action with their best welfare in mind. We are very grateful for their hard work over many years.’

White & Case became the latest US-headquartered firm to leave the region. A statement said that after careful consideration’, the firm was in the process of ‘winding down’ its operations in Russia.

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This story first appeared on Legal Business.