Return of the good times
The mood in the M&A market can swing to and fro very quickly. Only a year ago, prospects were cloudy. Lawyers talked of little certainty in the pipeline over the coming months but in summer 2015 there was a peak of activity with utilization rates at most firms high. There were more public takeovers over the past year than there have been for a long time. There was even the possibility of a hostile takeover of a DAX corporate with Canadian company Potash’s bid for K+S.
There is solid deal flow from Asia, although the difficulties in the Chinese economy seem certain to stem investment from there in the short term. By contrast, German companies remain, according to their lawyers, hesitant. “That’s disappointing for us as deal lawyers, but it’s also a reflection of the strength of the German Mittelstand: they only do something when they’re absolutely sure of it,” commented one well-known M&A lawyer.
German lawyers working on deals abroad more often
For a few years now, however, the state of the domestic market has not been the only yardstick for German M&A lawyers. The activity of German lawyers on M&A deals outside of the country, sometimes where there is little or no link to Germany at all, is (together with the pressure on prices from clients) the most important trend to emerge since the global financial crisis.
Firms such as Freshfields Bruckhaus Deringer have reengineered their practice so that industry experience, cultural knowledge, transaction handling and negotiation skills are the most important factors in building a practice. Almost every leading firm now reports that a sizeable minority of their partners are involved in advising key clients outside of Germany. And since cross-border work is normally better paid than domestic private M&A, which for the most part has become a commodity, it is a welcome development.
International firms flex their muscles
With so much cross-border work, it is perhaps no surprise that international firms have made gains in market share. Jones Day’s work for Potash was one example of an instruction, which a few years ago would almost certainly have landed with the top five firms. White & Case is another example of a practice which is beginning to see the benefits of investment in the London office and closer European integration.
Buoyant recruitment market
With a buoyant market, it is to be expected that firms will invest in partner recruits. A number of Clifford Chance’s competitors profited from its decision to rejuvenate its partnership, while Clifford itself won a heavyweight in Dr. Anselm Raddatz from Freshfields Bruckhaus Deringer. The loss of a private equity specialist to Latham & Watkins was an unexpected and heavy blow, however. Mayer Brown captured a highly-regarded M&A partner, Dr. Klaus Riehmer, from Cleary Gottlieb, while Ashurst strengthened its team considerably with Beiten Burkhardt’s best-known M&A specialist Dr. Thomas Sacher. The move of the Stuttgart office of GSK Stockmann to Heuking was a major surprise, giving the latter yet more breadth in its Mittelstand practice. Perhaps more significant for the future legal landscape was the investment made by accounting giant PricewaterhouseCoopers Legal: Freshfields partner Dr. Nikolaus Schrader was recruited to lead its attack on the M&A market.
The firms in this chapter are those which are identified as leading in the field of M&A. This chapter deals with legal advice as well as project and transaction management during the acquisition of company assets (known as asset deals) and shares (known as share deals involving either minority or majority shares).
Although the meaning of M&A includes mergers, a large number of lawyers active in this area expect such mergers to be part of pure ?corporate advice. Acquisition advice for private equity houses is discussed in the chapter ?private equity and venture capital.
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