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October 1, 2010 1:33 PM

Latham, Vinson Lead on Repsol's $7.1 Billion Sale to Sinopec

Posted by Brian Baxter

Spain's largest oil company announced on Friday that it had sold a 40 percent stake in its Brazilian unit to China's state-owned oil company for $7.1 billion--a sign that China is continuing to invest in oil and mining assets abroad.

Reuters reports that the deal makes Repsol's Brazilian arm one of the largest privately owned oil companies in Latin America. And two Am Law 100 firms landed key legal advisory roles on the transaction.

Latham & Watkins corporate partners José Luis Blanco and Ignacio Pallarés represented Repsol on the deal along with associate Xavier Pujol. Blanco joined Latham in December 2006 from leading Spanish firm Cuatrecasas, Gonçalves Pereira when Latham launched its Spanish law practice by opening offices in Barcelona and Madrid. Latham has since advised Repsol on the sale of a stake in an Argentine subsidiary and several other matters.

Taking the outside counsel lead for the China Petroleum & Chemical Corporation--better known as Sinopec--was Vinson & Elkins energy partner David Blumental, comanaging partner of the firm's Shanghai office. He was assisted by corporate partners Boyd Carano and Jay Kolb, energy partner Stephen Davis, international dispute resolution practice chair James Loftis, and international arbitration partner Christopher Walker.

Blumental and V&E have previously worked with the Beijing-based company on several noteworthy M&A deals. Last summer the firm advised Sinopec on its $7.2 billion acquisition of Addax Petroleum, which we previously noted was the largest-ever purchase of a foreign company by a Chinese buyer. V&E also handled Sinopec's $1.9 billion buyout of Tanganyika Oil in September 2008.

Blanco and Blumental were not immediately available for comment on the latest deal struck by Sinopec, which rivals the Addax acquisition in size. Repsol's general counsel is Luis Suárez de Lezo Mantilla and the head of Sinopec's in-house legal department is Shao Jingyang.

Repsol had been considering an IPO for its Brazilian arm, but the funds received from the Sinopec sale will allow the Madrid-based oil giant to continue developing newly discovered oil fields off Brazil's coast and elsewhere throughout Latin America, according to The New York Times. (Earlier this month Brazilian oil giant Petrobras--advised by Cleary Gottlieb Steen & Hamilton--raised more than $70 billion through an IPO to finance deepwater drilling initiatives.)

The sale of Repsol's stake to Sinopec requires the approval of Brazilian antitrust authorities.

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