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June 23, 2008 1:51 PM

Sidley Austin, Shearman & Sterling on $4.4 Billion Sweetened Corn Merger

Posted by Zach Lowe

Corn is big business these days, so much so that Senator Barack Obama's ties to the ethanol industry are under scrutiny in The New York Times today.

In a somewhat less sexy but perhaps equally big story, Bunge, the White Plains, N.Y., agribusiness founded in 1818, announced today that it will purchase Corn Products International for about $4.4 billion.

Bunge specializes in supplying fertilizer and processing oilseeds. Corn Products--whose customers include Coca-Cola and Kellogg--is one of the world's leading corn refiners and producers of starch. The acquisition is a move that makes sense for Bunge, given rising food prices, according to today's DealBook report. Corn Products generated about $198 million in net income last year, compared with Bunge's reported $778 million net income, according to a joint statement from the companies. Bunge will remain the third-largest company in this sector after Cargill Inc. and Archer Daniels Midland Co., according to a report in the Chicago Tribune.

A Sidley Austin team led by corporate partners John O'Hare and Thomas Cole advised Corn Products on the deal. They were joined by corporate partner Rob Verigan, environmental law partner Laura Leonard, tax partners Mary Niehaus and Stew Shepherd, antitrust partners Tom Ryan and David Giardina, labor law partner Jim Weiss, intellectual property partner Phil Crihfield, and real estate partner Stan Stallworth.

Sidley has been representing Illinois-based Corn Products for more than a decade, O'Hare says.

Corn Products will become a wholly owned subsidiary of Bunge, the companies said. Under the terms of the deal, Corn Products stockholders will receive a Bunge share worth $56 for each Corn Product share they own--a 31 percent premium.

Shearman & Sterling corporate partners John Madden--who served as head of the firm's M&A group from 1995 to 2001, and as co-managing partner of the firm from 2004 to 2008--and Clare O'Brien represented Bunge on the deal, which is expected to close sometime in the fourth quarter of 2008.

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