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December 19, 2008 7:57 PM

Deal Roundup: The Holiday Edition

Posted by Brian Baxter

Just when you thought all the deals were dead, a flurry of closes this holiday season should boost every dealmaker's spirits.

The biggest of the deals announced Friday was Panasonic's $9 billion acquisition of rival Japanese electronics maker Sanyo. Both companies are based in Osaka, and the two are quite familiar with one another--Sanyo was started by the brother-in-law of Panasonic founder Konosuke Matsushita and Panasonic has spent the past several months negotiating with Sanyo's three-largest shareholders: Goldman Sachs, Daiwa Securities, and Sumitomo Mitsui Banking.

While M&A work has slowed to a crawl in most places, The Deal reports that 2008 has been a record year for dealmaking in Japan. That said, talks between these two electronics makers have been on the brink of collapse before, so neither side is willing to call this deal done. Sanyo's primary U.S. subsidiary said there are no "specific details regarding the negotiations" and "discussions about the possibility of a capital and business alliance."

And so far no firms have come forward to formally attach themselves to the fledgling union. One favorite is Sullivan & Cromwell, which advised Goldman on the $2.6 billion stake it acquired in Sanyo along with Daiwa and Sumitomo Mitsui in January 2006. The three companies control about 70 percent of Sanyo.

Goldman has stalled Panasonic's previous efforts to acquire Sanyo, so S&C is likely involved in some regard. Davis Polk & Wardwell would have been another candidate--having advised Sanyo on its 2006 recapitalization effort by selling preferred shares to Goldman, Daiwa, and Sumitomo--but the firm confirmed late Friday that it was not involved. (Pillsbury Winthrop Shaw Pittman corporate partner Edward Perron in Los Angeles, who serves as general counsel to Sanyo's 18 U.S. subsidiaries, was out of the office and unavailable for comment.)

Other deals that crossed The Am Law Daily's radar...

M&T Bank / Provident Bankshares

The banking sector has been in turmoil the past few months but Buffalo-based M&T Bank has designs on expanding its mid-Atlantic regional base. On Friday, M&T announced it would acquire Baltimore-based Provident Bankshares for $401 million in stock. While that stock value might seem small, two M&A heavyweights had lead legal advisory roles on the deal.

M&T turned to a team from Wachtell, Lipton, Rosen & Katz for the transaction. Executive committee cochair Edward Herlihy led a team that included corporate partners Nicholas Demmo and Richard Kim, tax partner Joshua Holmes, executive compensation and benefits partner Jeannemarie O'Brien, and associates DongJu Song, Adrian Bell, Sabastian Niles, Brandon Price, Michael Sabbah, Michael Krasnovsky, and Robert Jackson, Jr.

M&T, which received preliminary approval from the Treasury Department in November to receive $600 million from the government's $700 billion financial rescue program, said in a statement that it will gain approximately $4.6 billion in deposits and $4.3 billion in loans from the merger.

Provident's outside legal team was led by none other than S&C chairman and banking extraordinaire H. Rodgin Cohen. Assisting Cohen were M&A partner Mark Menting and associate Melissa Sawyer. Provident was also advised by Kilpatrick Stockton M&A partners Paul Aguggia and Edward Olifer and executive compensation partner Eric Kracov.

MatlinPatterson / Flagstar Bancorp

S&C was at it again on another banking deal announced late on December 18. The firm served as counsel to New York-based MatlinPatterson Global Advisers, a private equity firm that specializes in distressed investments, on its acquisition of a $250 million stake in Troy, Mich.-based Flagstar Bancorp.

M&A partner George Sampas, financial institutions partner Mitchell Eitel, tax partner Andrew Mason, financial institutions special counsel Wendy Goldberg, employee benefits special counsel Lawrence Pasini, IP special counsel Blaze Waleski, and associates Christina Padden, Nishal Ramphal, Catherine Ying, Joel Alfonso, Heather Coleman, David Passey, David Teigman, and Rita Carrier advised MatlinPatterson.

As part of the deal, MatlinPatterson will acquire a 70 percent stake in Flagstar, which has been battered from losses stemming from its substantial real estate investments. The deal comes only one day after the New York Stock Exchange threatened to delist Flagstar because its stock price fellow below $1 for an extended period.

Flagstar, the largest publicly traded bank in Michigan, relied on counsel from Skadden, Arps, Slate, Meagher & Flom. Financial institutions and M&A partners William Rubenstein, William Sweet, Jr., and Frank Bayouth, and associates Andrew Alin and Jacob Abrams rounded out the team from the firm.

Brocade / Foundry

Brocade's $2.6 billion acquisition of Foundry Networks--which we originally reported on when it was announced in July--finally closed on Friday. The Am Law Daily's Julie Triedman details an interesting legal back story to the transaction in this week's Dealmaker profile.

While Brocade was advised by Richard Climan, head of the M&A group at Cooley Godward Kronish, Foundry relied on a team of former Heller Ehrman lawyers led by Steven Tonsfeldt. (Tonsfeldt was
cochair of the now-defunct firm's M&A practice and semiautonomous Venture Law Group.)

Tonsfeldt, who has since joined Silicon Valley transactional boutique White & Lee, had to close the big deal while his former firm dissolved around him. 

U.S. Trade Rep: The Ultimate Dealmaker

Soon-to-be former Vinson & Elkins public finance and policy partner Ronald Kirk--a two-term mayor of Dallas--was officially appointed U.S. trade representative by President-elect Barack Obama on Friday.

Despite being a Washington, D.C., outsider, Kirk, who chaired Obama's presidential campaign efforts in Texas, brings a wealth of business-friendly experience to The Capitol.

While working as a lobbyist for Energy Future Holdings (formerly TXU) in 2007, he helped push a $45 billion LBO of the company by Goldman Sachs, KKR, and TPG Capital through the Texas legislature. The work made him one of the Lone Star State's highest-paid lobbyists, a fact that evidently didn't deter Obama from picking Kirk for the cabinet level spot.

Multibillion-dollar private equity deals? They still do those?

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