The Work

June 12, 2009 3:42 PM

Skadden, S&C, Clifford Chance, Linklaters on $13.5 Billion BlackRock Deal

Posted by Zach Lowe

Our colleagues at Legal Week, our U.K. sibling publication, have the breakdown of which law firms did what in BlackRock Inc.'s monster $13.5 billion buy of the entire Barclays investment unit, known as Barclays Global Investors. The basics: Sullivan & Cromwell and Clifford Chance advised Barclays (a longtime client of both firms), while Skadden, Arps, Slate, Meagher & Flom (with help from Linklaters in the U.K.) took the lead for BlackRock, which has grown from a one-room office into a company with more than $2.7 trillion in assets--more than the Federal Reserve, according to Bloomberg and the New York Times

We've got some additional details to share. Barclays retained S&C in January, and the firm put a team of 50 lawyers--including a dozen partners--on the deal, says Alison Ressler, who led the firm's team along with partner Eric Krautheimer. 

Richard Prins led the Skadden team advising BlackRock. He did not immediately return  messages seeking comment. 

Close observers of the M&A landscape might remember that in April, Barclays struck a deal to sell its exchange-traded funds unit, iShares, which is part of the larger investment unit BlackRock purchased today. The private equity fund CVC Capital Capital partners agreed to buy iShares for $4.4 billion; S&C and Clifford Chance advised Barclays on that deal as well, as we reported in April.

Bloomberg speculates that deal is now dead, but Geoffrey Levin, the Cadwalader, Wickersham & Taft partner who advised CVC on the deal, would not confirm that for us when we reached him today. He says Cadwalader has been actively monitoring the BlackRock-Barclays chatter since April and performing due diligence to help CVC either close its original deal or respond to a BlackRock play. "You do everything you can," Levin tells us. 

BlackRock outbid one of its main rivals, Bank of New York Mellon, to snag the Barclays investment unit, according to the NYT. Sources familiar with the matter say Simpson Thacher & Bartlett advised BNY Mellon in the talks. Lee Meyerson, a Simpson partner who advised on the original merger between Bank of New York and Mellon Financial, did not immediately return a call seeking comment. 

BlackRock will fund the deal with $6.6 billion in cash and the rest in stock, Bloomberg reports. BlackRock will raise the money in part by selling $2.8 billion in equity to institutional investors and taking out up to $2 billion in loans from Barclays and other banks, Bloomberg says. 

The deal nets Barclays some cash to continue expanding its investment banking business, as it did when it scooped up a major unit of Lehman Brothers for $1.5 billion shortly after Lehman filed for bankruptcy in September. 

The Skadden team also included partners Sean Doyle, Franklin Gittes, and Barnet Phillips, the firm said. 

H. Rodgin Cohen, the chair of S&C, was also on the deal along with partners Donald Crawshaw, John Evangelakos, Frederick Wertheim, Neal McKnight, and Ronald Creamer, the firm said. 

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