The Work

November 17, 2011 5:48 PM

Skadden, Simpson Thacher and Wachtell Lead on $860 Million Office Supply Merger

Posted by Brian Baxter

Global packaging company MeadWestvaco said Thursday that it plans to divest itself of its office products business by spinning off the unit and then merging it with rival Acco Brands in a deal valued at about $860 million.

MeadWestvaco—which has in recent years been moving away from being a paper supplier to a maker of packaging products for major clients like Coca-Cola, Procter & Gamble, and Wal-Mart—will receive a $460 million cash dividend and its shareholders will own slightly more than half of the combined company, according to reports by Bloomberg and The Associated Press.

Acco Brands, one of the world's largest office supply makers with such well-known products as Swingline staplers and Kensington keyboards, has turned to Skadden, Arps, Slate, Meagher & Flom for counsel on the transaction.

Skadden M&A partner William Kunkel, tax partner Maxwell Miller, banking and finance partner Lynn McGovern, and antitrust partner Alec Chang are leading a team from the firm working on the matter. Skadden previously advised Acco on its spin-off from Fortune Brands and subsequent merger with General Binding in 2005. Steven Rubin is general counsel for Lincolnshire, Illinois–based Acco.

Wachtell, Lipton, Rosen & Katz corporate partner Gregory Ostling and of counsel Elliot Stein, antitrust partner Nelson Fitts, employee benefits partner Adam Shapiro, restructuring and finance partners Eric Rosof and Joshua Feltman, and tax partners Jodi Schwartz and Joshua Holmes are leading a team from the firm advising Richmond-based MeadWestvaco on the deal.

Wachtell previously advised the company on the $2.3 billion sale of its paper business to private equity firm Cerberus Capital Management in 2005. Now known as NewPage Group, the business filed for bankruptcy in September, partly as a result of an inability to refinance a debt load related to the buyout, according to our previous reports.

Simpson Thacher & Bartlett corporate partner Brian Stadler is representing MeadWestvaco's financial advisers Goldman Sachs and investment bank Greenhill & Co. MeadWestvaco's general counsel is Wendell Willkie II, a former Simpson Thacher associate and the grandson of Wendell Willkie, the 1940 Republican presidential nominee and late name partner at Willkie, Farr & Gallagher.

The transaction is expected to close in the first half of 2012, subject to shareholder and regulatory approvals, including a ruling from the IRS on the tax-free nature of the transaction.

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