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January 12, 2011 1:40 PM

Jones Day, Trio of Canadian Firms Advise on $5 Billion Mining Merger

Posted by Brian Baxter

International iron ore supplier Cliffs Natural Resources has agreed to pay nearly $5 billion in cash to acquire Montreal-based Consolidated Thompson Iron Mines in an effort to bolsters its presence in Canada, according to The New York Times.

Robert Profusek, chair of the M&A practice at Jones Day, is advising Cleveland-based Cliffs, along with M&A partner James Dougherty, banking and finance cochair Brett Barragate, capital markets partner Michael Solecki, antitrust partner Tom Smith, and associate Michael Costello.

Jones Day has enjoyed a longtime relationship with Cliffs. The firm has handled stock offerings, arbitration proceedings, M&A deals, and strategic alliances for the company, formerly known as Cleveland-Cliffs. Jones Day advised Cliffs on a proposed $10 billion merger with Alpha Natural Resources in July 2008 that fell apart a few months later because of the global economic crisis.

Cliffs reshuffled its in-house legal department earlier this month to create a dual general counsel structure. James Graham will serve as general counsel for global operations, while Gina Gunning becomes general counsel for corporate affairs and secretary. Both will report to P. Kelly Tompkins, chief legal officer for Cliffs and executive vice president of legal and government affairs. (Gunning is a former Jones Day partner.) Yale law professor Alan Schwartz is a member of the company's board of directors.

Blake, Cassels & Graydon is serving as Canadian counsel to Cliffs. Corporate partners Thomas McKee, Chris Hewat, Chris Javornik, Sheldon Vanderkooy, Michael Bantey, and Alfred Buggé, antitrust and regulatory partner Navin Joneja, environmental partner Jonathan Kahn, tax partner Jeffrey Trossman, financial services partner Ian Binnie, financial services and real estate partner James Papadimitriou, and labor and employment partner Natalie Bussière are leading the team from the firm.

Blakes and Jones Day were on opposite sides of another major merger involving a Canadian company: BHP Billiton's ultimately unsuccessful $40 billion bid for the Potash Corporation of Saskatchewan. With the country's banks flush with cash and its energy sector booming, Canada has become a hot spot for dealmaking in recent months.

Sander Grieve, national cochair of the mining group at Canadian firm Fraser Milner Casgrain, is serving as lead counsel to Consolidated Thompson. Brian Tobin, who serves as executive chairman of the board of directors and acting president and CEO for the company, is a senior business adviser with Frasner Milner. Tobin, a former premier of Newfoundland, served as Canada's federal minister of industry between 2000 and 2002. Pierre Lortie, another member of Consolidated Thompson's board and chair of the company's corporate responsibility committee, is also a senior business adviser at Fraser Milner.

A special transaction committee of the company's board of directors is being advised by corporate and M&A partners John Vettese and Jeffrey Roy and associate Jay King from Canadian firm Cassels Brock & Blackwell. Consolidated Thompson's general counsel is Valéry Zamuner.

The Toronto Globe and Mail reports that the Consolidated Thompson's largest shareholder, China's Wuhan Iron and Steel, supports the company's acquisition by Cliffs. The deal is expected to close in the second quarter of 2011, pending the approval of Consolidated Thompson's other shareholders and Canadian regulators.

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