Börse/LSE tie-up raises regulatory concerns
As Europe’s two largest financial market operators, the London Stock Exchange (LSE) and Deutsche Börse, begin their third attempt at a tie-up, concerns have been raised over antitrust issues.
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Freshfields Bruckhaus Deringer and Linklaters are advising on Glencore’s $2.5bn sale of a 40% stake in Glencore Agricultural Products to Canada’s largest pension fund, the Canada Pension Plan Investment Board (CPPIB).
Linklaters advised Glencore with a team led by corporate partner David Avery-Gee, while Freshfields corporate partners David Higgins and Richard Thexton advised CPPIB. Amsterdam managing partner Winfred Knibbeler also advised on the deal for Freshfields.
With the deal having been in the pipeline since last year, the 40% stake values the agricultural business at around $6bn and the sale proceeds will be used to reduce Glencore’s $30bn debt pile. The miner and commodities trader has suffered from a dramatic fall in share value over the past year amid the collapse in world commodity prices linked to China’s economic slowdown.
Glencore and CPPIB have also agreed to an initial four year lock-up period, subject to a carve-out, for Glencore to sell up to a further 20% stake in the business. As well as customary exit provisions, including a right of first refusal, each of Glencore and CPPIB may call for an initial public offering of Glencore Agri after eight years of closing.
Last September Glencore gifted Linklaters with an advisory role on cutting $10.2bn of debt, with corporate heavyweight Charlie Jacobs, who handles the firm’s relationship with Glencore, selected to advise.
Freshfields, meanwhile, previously advised its longstanding client CPPID on its $250m investment in Markit group, another deal on which where Higgins also led. However, Glencore did instruct Freshfields itself last month to sue Colombia over claims the government sought to revoke parts of a coal mining licence.
On the deal, Glencore Agri chief executive Chris Mahoney said: ‘With the investment potential created by this partnership, and given the existing network of high-quality origination, logistics and port assets in key export regions, the business is now well-placed to take advantage of the significant opportunities that are expected to emerge across the sector in the coming years.’
sarah.downey@legalease.co.uk
A year after launching a nearshoring office in Manchester, Freshfields Bruckhaus Deringer has taken its plans to hive off low-level legal work to legal services centres has accelerated with plans in place to open a hub in Vancouver, Canada.
Located on the west coast of Canada, Vancouver is well-placed to provide business services functions to the firm’s US offices in New York and Washington DC. With around 30% of the city’s inhabitants of Chinese heritage, giving Vancouver one of the highest concentrations of Chinese residents in North America, the location also offers Freshfields access to a talent base able to provide legal services in Mandarin to its China offices.
The office, like Manchester, is set to cover a wide range of business services roles. The firm is looking to hire at least 20 legal services employees to launch the office.
Michael Lacovara, Freshfields’ executive partner, said in a statement: ‘The demand from our clients and people means that we are now planning to establish a global centre in North America.’
The firm’s legal services hub in Manchester has grown at rapid speed, with IT, human resources and document review support teams all being established in Manchester as a means of creating better efficiency. The firm’s drive to create legal services centres comes as part of a wider nearshoring drive by Big Law, with Magic Circle rival Allen & Overy opening in Belfast in 2011 and elite US firm Latham & Watkins launching a Manchester outpost at the start of last year.
Freshfields’ will move into its permanent Manchester base, One New Bailey in Salford, later this year from its current location in Arndale House.
tom.moore@legalease.co.uk
For more on Freshfields’ recent strategic developments, see The last champions – meet the leaders intent on sealing Freshfields’ place in the global elite
Mining and commodities giant Glencore has instructed Magic Circle firm Freshfields Bruckhaus Deringer to sue Colombia over claims the government sought to revoke parts of a coal mining license.
Glencore, which in March reported a 32% drop in annual profits after being hit by weak commodity prices, has filed an arbitration claim at the International Centre for Settlement of Investment Disputes (ICSID) in Washington DC over claims the Colombian government has sought to revoke parts of an amended concession agreement signed with government in 2010 to expand the mine.
The damages could run into billions of dollars, with a 1,637-page prospectus put out by Glencore as part of its $11bn IPO on the London Stock Exchange in 2011 stating it had spent $2.6bn on expanding coal production in Colombia. The plan was to double production at its Calenturitas and La Jagua mines to 20.7 million metric tonnes per annum by 2015, with $1.5bn spent on mining concessions, mining equipment, transport, port and other infrastructure up until the end of 2010. Two years after the amendment to the concession, then Colombian mines and energy minister Amylkar Acosta said Glencore must pay higher royalties after purchasing different companies operating in Colombia and reducing costs through integration.
A team from Freshfields, led by Washington-based Nigel Blackaby, is representing Glencore in a claim brought under the 2006 Switzerland-Colombia bilateral investment treaty. Blackaby is global co-head of Freshfields international arbitration group and its Latin America group.
Dechert has been instructed to defend Colombia, with Paris-based Eduardo Silva Romero leading a team that includes Washington-based international counsel Alvaro Galindo and Juan Felipe Merizalde Urdaneta.
Glencore’s activites in Colombia have been dogged by scandal, with at least 10 people murdered when paramilitaries seized a patch of land called El Prado next to Glencore’s Calenturitas coal mining concession in 2002, while communities have been rehoused over environmental damage and the firm has faced large-scale strikes by workers over low salaries.
In the past the metals firm has used Magic Circle firms Linklaters and Clifford Chance to implement plans to cut $10.2bn from the business’ $30bn debt pile, in Glencore’s biggest mandate since its $66bn acquisition of Xstrata in 2013. The legal team chosen by Glencore was the same team from Linklaters and Clifford Chance that executed the drawn-out Xstrata deal.
In disputes Glencore used Clyde & Co last year when it lost a high court case against Romanian oil company OMV Petrom. It was ordered to pay out just over $40m for fraudulently shipping oil of a lower than supposed quality to Romania in the 1990s.
tom.moore@legalease.co.uk
Freshfields Bruckhaus Deringer, the last Magic Circle firm to post its trainee retention rate this spring, posted a reduced figure, keeping on 82% of trainees this spring. The firm offered 33 of 38, or 87% of its trainees places.
The rate is slightly worse than last year’s spring figure of 85%, after the firm kept on 41 of 48 trainees, after offering 91% of the trainees places.
By keeping 31 out of 38 trainees, the firm has performed better than Magic Circle peer Clifford Chance, which posted a rate of 80%. Freshfields once again did not disclose in which offices and practice areas the trainees would be qualifying.
However Freshfields performed poorly in comparison with Linklaters which posted an 83% rate and Allen & Overy (A&O) which kept on 39 of 43 or 91% of trainees. Both (A&O) and Linklaters kept on fewer trainees this year than spring prior.
Slaughter and May has had the best retention rate of the Magic Circle this time around, with a rate of 91%, when 38 of the firm’s 40 qualifying trainees accepted newly-qualified positions. The intake was an improvement on Slaughter and May’s autumn 2015 figure of 33 of 37 trainees, and ahead of its 2015 spring intake when 88% of a 42 strong cohort accepted offers.
Earlier this week, Berwin Leighton Paisner posted a 70% retention rate for March. With a markedly smaller trainee cohort of 20, 14 of the 16 positions that the firm offered were accepted. The new trainee intake will be spread across the firm’s finance, real estate, corporate, litigation and corporate risk practices.
Our sister website The Lex 100 has created a retention rate table which will be updated as more figures are announced.
victoria.young@legalease.co.uk
Freshfields Bruckhaus Deringer disputes veteran Ian Terry is leaving the Magic Circle firm after 38 years and heading to the Bar.
After a long-standing run with Freshfields Terry is retiring from the firm and will join One Essex Court as a mediator later this year.
Terry joined Freshfields in 1978, one year after studying law at the University of Oxford. He qualified in 1980 and became a partner in 1986.
He became managing partner in 1996 for five years, becoming the first litigator to take on the role, and was the practice group leader for disputes from 2006 to the end of 2008.
In recent years, Terry has acted in a number of high profile Russian and CIS related disputes. Some of his highlight matters include representing various defendants in proceedings brought by Boris Berezovsky against Roman Abramovich and others in the UK High Court; advising a Ukrainian oligarch in UK High Court and LCIA proceedings brought by a fellow oligarch; and acting for a leading pharmaceuticals company in a dispute with a biotech company concerning the royalties payable in relation to a blockbuster drug developed in a joint collaboration.
Freshfields boasts a large disputes team in the City with over 30 partners specialising in disputes including Ian Taylor, Geoff Nicholas and, Chris Pugh who was recently elected co-global managing partner of the firm.
‘I have been involved in a lot of mediations in my time and know many fantastic counsel at One Essex Court and I’m really excited about joining,’ Terry told Legal Business. ‘I have had the privilege to be involved in all the international expansion in what was a very interesting time for the firm.’
jaishree.kalia@legalease.co.uk
For more on Freshfields see the feature ‘The last champions – meet the leaders intent on sealing Freshfields’ place in the global elite.’
Freshfields Bruckhaus Deringer has hired Clifford Chance’s Alastair Mordaunt to become the new competition head of its Hong Kong practice.
Mordaunt joined Clifford Chance in 2011 as a partner and has been based in the London office, but the new role will see him relocate from the City to lead Freshfields Asia’ competition team.
Before Clifford Chance, Mordaunt spent five years at the UK’s Office of Fair Trading, most recently as director of a competition enforcement team and director of the mergers group before that.
Mordaunt returns to Freshfields where he previously was a solicitor for eight years from 1999 during which he worked in the London, Brussels and Washington DC office.
Asia managing partner Robert Ashworth said: ‘Alastair’s background as a regulator combined with our distinctive competition litigation expertise in Hong Kong will provide a compelling offering to local and international clients doing business in Hong Kong, where enforcement will take place largely through a contentious tribunal system.’
‘In terms of the global regulatory environment in competition and antitrust, Hong Kong is a very exciting place to be,’ Mordaunt said. ‘Very rarely do companies have to come to grips with an entirely new regime in such a sophisticated market. In that sense, the Hong Kong competition regime poses some unique challenges for companies doing business in the jurisdiction.’
The hire comes weeks after Freshfields hired Kirkland & Ellis’ capital markets partner Andrew Hagan in London who will join the Magic Circle firm in April.
jaishree.kalia@legalease.co.uk
Freshfields Bruckhaus Deringer has announced 16 lawyers will make the cut to partnership this year, one less than last year when 17 were promoted.
The first round to be revealed by a Magic Circle firm for 2016, Freshfields’ promotions sees five of the total or 29% being made up at its Fleet Street headquarters with Charles Hayes in corporate, Gabriel Mpubani in finance, Craig Montgomery in disputes, Alice Greenwell in employment, and Vikki Hills in real estate, all joining the partnership.
This is an increase from 2015 when just three partners were made up in the City with two in corporate and one in employment.
The remainder of this year’s promotions were mainly across Europe in the Düsseldorf, Paris, Madrid, Vienna offices, alongside New York, Washington DC and Dubai. No promotions were made in Asia.
The partnership round at the Magic Circle firm still has some way to go before reaching the levels of 2011 and 2012, when Freshfields made up 20 partners, although the firm has steadily increased its rounds since 2013 when the firm promoted 14 lawyers and in 2014 when 15 were made up.
The appointments will take effect on 1 May 2016.
jaishree.kalia@legalease.co.uk
The partnership promotion list in full:
Antitrust, Competition and Trade
Katrin Gassner, Düsseldorf
Mary Lehner, Washington
Corporate
Rob Cant, Dubai
Charles Hayes, London
Florent Mazeron, Paris
Javier Monzon, Madrid
Stephan Pachinger, Vienna
Dispute Resolution
Moritz Becker, Düsseldorf
Craig Montgomery, London
Caroline Richard, Washington
Employment, Pensions and Benefits
Alice Greenwell, London
Finance
Haris Meyer Hanif, Dubai
Gabriel Mpubani, London
Ryan Suda, New York
Real Estate
Vikki Hills, London
Tax
David Beutel, Munich
I had no intention of doing law. My father was a detective in the Scottish flying squad. I wanted to join the police.
I got a traineeship at Dundas & Wilson where I was the only female trainee. I was also one of the very few that hadn’t been to public school. People were nice but it did feel very odd.
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Kirkland & Ellis has lost capital markets partner Andrew Hagan to Freshfields Bruckhaus Deringer, within days of the firm losing a six-partner team to Sidley Austin.
Hagan will join the Magic Circle firm in April this year and is a boost for Freshfields which is steadily building its debt markets team. The hire comes after the recruit of high-yield heavyweight Ward McKimm who quit Kirkland to co-head Freshfields European leveraged finance team in London in June 2015.
Some of Hagan’s deal highlights include advising Credit Suisse, Barclays, JP Morgan and KKR in connection with R&R Ice Cream’s offering of €150m senior secured notes due 2020; and representing CVC Capital Partners on the issuance of €550m floating rate senior secured high-yield bonds due 2021 to finance of CVC’s acquisition of ParexGroup Participations SAS.
Freshfields global finance group head David Trott said: ‘The firm is rightly regarded as a first choice for European high yield transactions and Andy’s experience and expertise will ensure that we continue to develop our market-leading leveraged finance platform and to offer clients a first-class high yield capability.’
The news comes after a six-partner team from Kirkland announced they would exit the firm to set up a City private equity team at Sidley Austin. While there has been a lateral partner revolving door between Kirkland and other rival firms, Kirkland rarely loses a sizeable team like this.
City private equity partners Christian Iwasko, Erik Dahl and Fatema Orjela alongside banking partner Bryan Robson, corporate partner Sava Savov and tax partner Oliver Currall are set to exit Kirkland to join Sidley Austin.
The team hire will improve Sidley Austin’s private equity offering which currently only cites one partner, Stephen Blackshaw, who also co-heads the corporate group, as advising on private equity transactions in London; alongside two other partners who are also based in the US.
jaishree.kalia@legalease.co.uk
