The Work

January 10, 2011 2:19 PM

Three Firms Land Roles on Proposed $13.7 Billion Energy Merger

Posted by Brian Baxter

Duke Energy, the third-largest utility in the U.S., announced on Monday that it would seek to combine operations with rival Progress Energy in an all-stock $13.7 billion deal that would create the nation's largest utility. Three Am Law 100 firms have landed lead outside legal advisory roles on the transaction.

Wachtell, Lipton, Rosen & Katz is lead corporate counsel on the deal for Charlotte-based Duke. The team consists of: corporate partner Steven Rosenblum, antitrust partner Joseph Larson, employee benefits partner Jeremy Goldstein, restructuring and finance partner Eric Rosof, tax partner Deborah Paul, corporate counsel Nancy Greenbaum, and associates Gordon Moodie, Brett Shawn, Adam Kaminsky, Austin Witt, Jennifer Nam, and Vincent Kalafat. Duke's general counsel is Marc Manly.

Antitrust and regulatory counsel for both Duke and Progress on the proposed merger is being provided by Skadden, Arps, Slate, Meagher & Flom. The firm's team includes energy practice head Clifford "Mike" Naeve, energy partner William Scherman, U.S. antitrust leader Steven Sunshine, and antitrust partner John Lyons. Skadden previously advised Duke on its $9 billion all-stock merger with Cinergy in May 2005. (Wachtell advised Cinergy on that deal.)

Skadden and Wachtell also handled a $1.6 billion all-stock deal last year between Mirant Corporation and RRI Energy that created GenOn Energy, which became the second-largest independent power producer in the country, according to our previous reports. That deal was the latest sign of consolidation in the energy industry, which in 2010 also saw FirstEnergy acquire Allegheny Energy in a $4.7 billion deal and Northeast Utilities turn to Skadden for its October acquisition of NSTAR. (Both deals are currently awaiting regulatory approval.)

Raleigh-based Progress turned to Hunton & Williams for legal counsel on its merger with Duke. Energy and finance partner James "Jeff" Jones III, corporate finance and M&A cohead Gary Thompson, corporate and client relationship partner Timothy Goettel, corporate partners Andrew Gerber and Melvin Tull III, employee benefits partner J.G. "Jay" Ritter II, tax partner Alexander McGeoch, and associates Steven Haas, Janet Dawson, and Daniel Walker led the team from the firm.

Hunton has previously advised Progress on its $1.16 billion sale of its natural gas business to EXCO in October 2006 and its $7 billion acquisition of a Florida subsidiary in 2000. John McArthur, a former Hunton partner, serves as the company's general counsel. Progress CEO William "Bill" Johnson also once worked as a partner in Hunton's Raleigh office.

Progress and Duke hope to complete their merger by the end of 2011, but as noted by The New York Times, several regulators will have to approve the deal, including the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission, and state authorities in North and South Carolina.



Tallying Up the First Merger Monday of 2011
The New York Times, 1/10/11

New Year, Windfall of Mergers
The Montreal Gazette, 1/10/11

M&A Ready to Join High-Grade Party
The Wall Street Journal, 1/10/11

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