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September 28, 2009 1:54 PM

Freshfields, Baker & McKenzie Advise Longtime Clients in $7.1 Billion Abbott-Solvay Deal

Posted by Zach Lowe

Baker & McKenzie is advising longtime client Abbott Laboratories in its $7.1 billion acquisition of Solvay SA's drug unit, a deal that will give Abbott control of new drugs and expand its access to non-U.S. markets, according to Bloomberg and lawyers on the deal.

Solvay has turned to a team from Freshfields Bruckhaus Deringer led by corporate partners Geert Verhoeven in Brussels and Timothy Wilkins in New York. The acquisition is a private all-cash deal that does not include the exchange of public shares, according to Verhoeven and Wilkins.

Cleary Gottlieb Steen & Hamilton is handling antitrust work for Abbott. The deal will require antitrust approval in Europe and the U.S., though Verhoeven says the companies do not expect any significant antitrust hurdles. 

Freshfields and Baker won lead roles on the megadeal after decades of service for Solvay and Abbott, respectively. Baker has advised Abbott on dozens of transactions and has represented the Illinois-based company since the mid-twentiethth century, according to this profile of the firm in last October's issue of The American Lawyer by our colleague Vivia Chen. According to Chen's piece, the demands of representing a giant like Abbott spurred Baker to open several international offices in the 1950s, a process that would ultimately result in Baker becoming a 70-office worldwide behemoth.

Pablo Garcia-Moreno, based in Baker & McKenzie's Chicago office, has been the Abbott relationship partner for several years, according to the firm's Web site. He is leading the team advising Abbott on its acquisition, according to Verhoeven and Wilkins. Garcia-Moreno has represented Abbott on several deals in the past, including its $6.9 billion acquisition of BASF's pharma business and the spin-off of Abbott's hospital products unit into a separate $4.5 billion company. He did not immediately return a call seeking comment.

Freshfields' London office began representing Solvay more than 20 years ago, Verhoeven says, and the firm's Brussels office became Solvay's go-to source for outside counsel as the firm expanded the office in the 1990s. Freshfields has advised Solvay on several recent deals, including its $1.3 billion acquisition in late 2001 of Ausimont, a leading producer of polymers used in cables and architectural coatings, Verhoeven says.

Solvay was mainly concerned about the certainty of closure, and the lawyers negotiated a deal that includes very few closing conditions to address that concern, Wilkins and Verhoeven say. (Antitrust approval is the main condition, the lawyers say.) Since the deal involves no exchange of shares in a publicly traded company, there is no opportunity for a competitor to offer a competing bid, the lawyers say. "Once the agreement is signed, the deal is firm," Verhoeven says.

The acquisition also includes clauses that could result in Abbott paying an additional $440 million depending on the performance of various Solvay drugs, according to Verhoeven and a report in Bloomberg. The deal will reduce Abbott's dependence on its biggest seller--the arthritis treatment Humira--and help Abbott gain a foothold in Russia, Eastern Europe, and Latin America, markets in which sales currently are weak, Bloomberg says.

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