Firms Feast on Pre-Thanksgiving M&A Deals in Finance, Luxury, Pharma Sectors
In a big day for M&A, Sullivan & Cromwell, Skadden, Paul Weiss, Allen & Overy, Davis Polk and Wachtell took roles advising on three deals totaling over $50 billion.
November 25, 2019 at 04:27 PM
6 minute read
The hours from Sunday afternoon through Monday morning brought back-to-back deal announcements totaling more than $50 billion, making for one of the higher-dollar mergers and acquisitions days in recent memory.
The largest was the acquisition of TD Ameritrade by competitor Charles Schwab for $26 billion. Add to that luxury giant LVMH's $16.2 billion deal to acquire Tiffany & Co. and the roughly $9 billion that Swiss pharma company Novartis is paying for The Medicines Co., and pretty soon you're talking real money.
Here are the details:
Davis Polk, Wachtell Guide Blockbuster Merger for Schwab/TD Ameritrade
Davis Polk & Wardwell represented bank and brokerage firm Charles Schwab as it acquired competitor TD Ameritrade for $26 billion in an all stock transaction. Omaha-based Ameritrade was represented by global M&A deal revenue leader Wachtell, Lipton, Rosen & Katz.
The Davis Polk team was co-led by financial institutions M&A partners Randall Guynn, William Taylor and Lee Hochbaum. The financial institutions/M&A team included counsel Christopher Paridon and associates Matthew Cowcher and Erin Brinig. Rounding out the team were Investment management partner Gregory Rowland, anti-trust partner Ronan Harty, capital markets partner Shane Tintle, executive compensation partner Jeffrey Crandall and tax partner David Schnabel. The Davis Polk team was based in New York and D.C.
Davis Polk assisted Schwab in a transaction earlier this year. In July, Schwab made a $1.8 billion acquisition of USAA's Investment Management Co. The deal was lead by Davis Polk corporate partner William Taylor.
The combined company will serve about 24 million brokerage accounts and have roughly $5 trillion in client assets.
Schwab, the larger of the two brokerage houses, is based out of San Francisco, has over 365 offices,19,000 employees and a $60 billion market cap.
In a statement, Schwab president and CEO Walt Bettinger said, "We have long respected TD Ameritrade since our early days pioneering the discount brokerage industry, and as a fellow advocate for investors and independent investment advisors."
While smaller, TD Ameritrade is still a giant, valued as a $26.2 billion company with over $1.3 trillion in assets.
The combination of the two could potentially cause federal regulators to raise an eyebrow, experts said. As The Washington Post noted, the new company's peer competitor, E-Trade, manages only about $500 billion in assets.
As part of the deal, the new company's headquarters would be moved to Schwab's new campus in Westlake, Texas. Both companies currently have some presence there.
Skadden, Sullivan & Cromwell Broker Largest Luxury Deal Ever
Skadden, Arps, Slate, Meagher & Flom advised LVMH Moet Hennessy Louis Vuitton, and Sullivan & Cromwell advised Tiffany & Co. as the French luxury goods goliath purchased the iconic U.S. jeweler for a record $16.2 billion, the largest deal in the sector's history.
The Skadden team was lead by M&A partners Howard Ellin, Sean Doyle, Armand Grumberg and Arash Attar-Rezvani, counsel Dohyun Kim and associates Max Troper, Maxwell Kaufman, Franklin Greg, Julien Zika and Natalia Rotaru; executive compensation and benefits partner Regina Olshan and tax partner Thomas Perrot and associate Margaux Lizé. Grumber, Attar-Rezvani, Zika, Rotaru, Perrot and Lize are based in Paris, while the rest of the team is situated in New York.
Sullivan & Cromwell's team was spearheaded by corporate partners Frank Aquila, Melissa Sawyer, Olivier de Vilmorin, executive compensation partner Heather Coleman and associates Susie Choi and Chiyel Hayles. All but de Vilmorin (Paris) are based in New York.
"We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewelry world, to the LVMH family," Bernard Arnault, the chairman and chief executive of LVMH, said in a statement.
LVMH is already the largest luxury goods company in the world with an annual revenue north of $50 billion. The addition of Tiffany's adds a new dimension to the company's offering, bringing it into what industry experts call the "hard luxury sector," which includes jewelry and watches.
This is the second American addition that LVMH has had in the past year, as the company partnered with pop singer Rihanna (full name Robyn Rihanna Fenty) to create the luxury house Fenty back in January of this year.
Tiffany's, which has over 300 stores in the U.S., had been going through some rough times before former Bulgari (which was purchased by LVMH in 2011) CEO took over and helped stage a comeback by targeting the Chinese market and younger shoppers, according to The New York Times.
Goldman Sachs was the financial adviser for LVMH and advised by New York-based Fried, Frank, Harris, Shriver & Jacobson corporate partner Philip Richter and associate Roy Tannenbaum.
Magic Circle firm Allen & Overy advised the banks for LVMH's loans on the deal. Counsel Thomas Roy led the deal from Allen & Overy Paris, with partners Nick Clark and Todd Koretzky providing support from London and New York, respectively.
Sullivan & Cromwell, Paul Weiss Drive Big Pharma Acquisition
Sullivan & Cromwell advised Swiss pharmaceutical heavyweight Norvartis in its acquisition of biotech firm The Medicines Co. for $9.7 billion. Paul, Weiss, Rifkind, Wharton & Garrison represented New Jersey-based Medicines Co., which is close to marketing a promising cholesterol-lowering drug, Inclisiran.
According to SEC filings, the Sullivan & Cromwell team was headed up by a couple of familiar names. Corporate partners Frank Aquila and Melissa Sawyer, who also worked on the LVMH/Tiffany & Co. deal, led the effort for Sullivan & Cromwell, along with longtime corporate partner Matthew Hurd.
Hurd has been involved in many of the larger pharma deals from the past year, including Amgen purchasing the Otezla drug from Celgene and Bayer's sale of Bayer Animal Health to Elanco.
Paul Weiss corporate partner and global head of M&A Scott Barshay led the deal on Medicines Co.'s end..
Inclisiran, Medicines Co.'s cholesterol-lowering drug, is in late stage development, and Novartis hopes to add it to its growing list of acquired pharmaceuticals.
"We're hoping to reimagine treatment of the leading global cause of death. This could be a strong step forward in Novartis's transformation into a focused medicines company," Vas Narasimhan, the Novartis chief executive, said Sunday in a tweet.
Novartis must think highly of the drug. The company is paying $85 a share for Medicines Co., well above the Friday's closing price of $68.55.
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