Volkswagen / Credit: josefkubes/iStockphoto.comFreshfields and Allbright Lead On China's Biggest Ever Electric Car Deal
In its first of two multi-billion euro deals, the firm is advising Volkswagen on a set of deals jointly worth €2.1 billion, expected to transform China's electric car market.
June 19, 2020 at 06:40 AM
3 minute read
Freshfields Bruckhaus Deringer has landed two multi-billion euro mandates in deals involving automotive giants Volkswagen and Continental.
In the first transaction, Freshfields is advising Volkswagen on a set of deals jointly worth €2.1 billion, according to a statement from Freshfields. They amount to, according to Freshfields lawyers, China's largest-ever electric vehicle deal.
The firm is acting opposite Shanghai-based firm AllBright Law Offices, which is advising China-headquartered motor company Anhui Jianghuai Automobile Group (JAC Motors)—VW's partner in an ongoing joint venture in the region known as JAC Volkswagen.
As part of the deal, Volkswagen plans to increase its share in JAC Volkswagen, investing around €1 billion. This includes the acquisition of a 50% stake in JAG—JAC's parent company, and an increase of its stake in JAC Volkswagen from 50% to 75%.
Further, Volkswagen will acquire a 26% stake in battery-maker Gotion High-Tech Co for around €1 billion, becoming the company's largest shareholder.
The Freshfields team advising Volkswagen includes partners Yuxin Shen, Alan Wang on corporate and Ninette Dodoo on anti-trust.
Baker McKenzie acted as regulatory compliance counsel to Volkswagen with a team led by Shanghai partner Simon Hui.*
JAC was advised by AllBright, according to a person familiar with the transaction.
Freshfields has been advising Volkswagen on the legal fall-out of the Dieselgate scandal, in which Volkswagen admitted to having intentionally programmed diesel engines installed in millions of cars globally to skirt U.S. emissions standards.
In its second major mandate, Freshfields is advising on a €3 billion loan to automotive supplier Continental AG. The loan is expected to help shore up the company's financial flexibility as it weathers the fallout from the coronavirus crisis.
Continental, based in Hanover, Germany, is building up its financial flexibility as the economic fallout from the coronavirus pandemic hits the automotive industry. Earlier this month, the company said it would be cutting its dividend and trimming supervisory board and executive compensation.
Freshfields advised the banking consortium, led by finance partner Frank Laudenklos. The consortium consists of 10 banks as underwriters, led by Deutsche Bank, Commerzbank Aktiengesellschaft, and UniCredit, according to a statement by Freshfields.
Meanwhile, Linklaters is advising German automotive supplier Continental AG, led by partner Marc Trinkaus.
For Freshfields, these are the latest two deals in a string of recent major mandates during the pandemic, which also saw the firm advise Lufthansa on a government bailout earlier this month, and Adidas on a €3 billion line of credit in April.
*Updated 6/22: This story has been updated with Baker McKenzie's role as Volkswagen's regulatory compliance counsel on the JAC Motors deal.
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