April 3, 2012 7:05 PM
Banking Deals From Canada to Indonesia a Boon to Big Firms
Posted by Brian Baxter
Takeover volume may have dropped in the first quarter of 2012, but some optimistic observers say that as the global economy improves and stock markets stabilize, the dealmaking market could still be poised for a reversal.
One industry seeing a flurry of deals of late is the banking and financial services sector, where a trio of billion-dollar transactions have generated roles for corporate lawyers at several large firms.
On Monday, Singapore’s DBS Group Holdings announced that it would buy Indonesia’s Bank Danamon for $7.2 billion in one of the largest financial services takeovers ever in Southeast Asia, according to The New York Times’s DealBook.
DBS is the holding company for DBS Bank, previously known as The Development Bank of Singapore, the largest bank in the city-state. Reuters reports that the move by DBS to buy Bank Danamon at a 52 percent premium would rank as the fourth-largest banking deal ever in Asia, but could also stir protectionist measures by nationalists within Indonesia.
Indonesian press reports state that if approved, DBS would become the fifth-largest lender in the country, whose booming economy has become an increasingly attractive destination for international firms.
A statement on DBS’s proposed cash-and-shares acquisition of Bank Danamon shows that Singapore’s WongPartnership and Jakarta-based Hadiputranto, Hadinoto Partners are advising DBS, which is offering to buy the 67.4 percent stake in Bank Danamon held by Singapore’s sovereign wealth fund Temasek. (Temasek is a presence on both sides of the proposed deal, as it also owns 29 percent of DBS.)
Bank Danamon did not immediately provide the names of its own outside legal advisers by the time of this story. Oei “Fransiska” Lan Siem serves as legal and compliance director for Bank Danamon.
In another major financial services deal announced this week, The Royal Bank of Canada said Tuesday it would pay $1.1 billion in cash to buy the remaining half of RBC Dexia Investor Services it doesn’t already own. London-based RBC Dexia was founded in 2006 as a joint venture between RBC and European financial services giant Dexia.
Magic Circle firm Allen Overy is representing RBC on its move to buy out Dexia’s stake in RBC Dexia through corporate partners Mark Gearing and Jim Ford in London, according to an RBC spokeswoman. Osler, Hoskin Harcourt is serving as Canadian counsel to RBC. Both firms previously advised Toronto-based RBC on its joint venture deal with Dexia six years ago.
Jacques Lamarre, hired two years ago as a strategic advisor to Canadian firm Heenan Blaikie, serves on RBC’s board of directors, along with Paule Gauthier, a longtime Canadian public servant and senior partner with Quebec firm Stein Monast. Edward Sonshine, another prominent Canadian lawyer, also sits on the RBC board. David Allgood serves as RBC’s general counsel.
Michael Wilson, the global head of strategy and corporate services for RBC Dexia, who also handles the joint venture’s legal and compliance operations, did not respond to a request for comment on the joint venture’s outside legal advisers. An RBC Dexia spokesman was not immediately able to provide information about law firms working on the matter.
The CBC reports that RBC is buying back its RBC Dexia stake from Banque Internationale a Luxembourg, one of three arms that comprise the ailing Dexia, which has been busy unloading assets in recent months in order to raise capital.
Five firms grabbed roles last October on a French and Belgian rescue package for Brussels-based Dexia, which was struggling from its exposure to Greek debt, according to our previous reports. Cleary Gottlieb Steen Hamilton advised Dexia in December its $952 million sale of its Luxembourg unit to a Qatari investment group.
Dexia turned to Linklaters and Canadian firm Blake, Cassels Graydon for outside counsel on its joint venture agreement with RBC in 2006. (Neither firm was immediately able to confirm its involvement on the current deal.)
Meanwhile, Linklaters and rival Magic Circle firm Clifford Chance both landed lead roles on a major Russian banking merger completed last month, according to U.K. publication Legal Week.
Bloomberg reported in March that Sberbank, one of Russia’s largest financial institutions, had finally reached an agreement to buy privately owned investment bank Troika Dialog for more than $1 billion. The move by Moscow-based Sberbank, about half of which is owned by the Russian state, will see the country’s government extend its reach into the investment banking sector.
Linklaters corporate partners Denis Uvarov and John Goodwin are leading a team from the firm advising Sberbank, along with corporate and finance partner Jack Boldarin from offshore firm Walkers, which is serving as Cayman and British Virgin Islands counsel on the deal. (Sberbank tapped another Magic Circle firm, Freshfields Bruckhaus Deringer, for counsel in February on its $661 million acquisition of the international arm of Vienna-based Volksbank.)
Legal Week reports that White Case is representing Troika’s shareholders, who own a 63.6 percent stake in the investment bank, while Clifford Chance is advising South Africa’s Standard Bank, which owns the remainder of Troika’s shares. The deal was originally announced last year but regulatory hurdles got in the way of its completion, according to Legal Week. Reuters reports that the Russian government has announced a plan to sell a $6 billion stake in Sberbank.
While some banks abroad focus on getting bigger, closer to home, some banking lawyers are alarmed at the movement in the opposite direction.
Sullivan Cromwell senior chairman H. Rodgin Cohen, perhaps the country’s most prominent banking lawyer, told The Street this week that those advocating for breaking up the largest banks in the U.S. under the guise of a revitalized Glass-Steagall Act aren’t basing their critiques on sound historical evidence.
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