Clifford Chance and Freshfields advise as BAE and EADS mull tie-up

Clifford Chance and Freshfields Bruckhaus Deringer have won roles alongside a string of local firms on the potential tie-up of European defence giants EADS and BAE Systems.

The magic circle duo have been instructed to advise on discussions over the possible €38bn (£30.5bn) combination, which BAE confirmed yesterday (12 September) following movement in its share price.

Clifford Chance is advising Dutch aerospace group EADS on UK aspects, with the team led by global corporate head Matthew Layton alongside fellow City corporate partners Lee Coney and Patrick Sarch and Paris and Brussels-based global antitrust head Oliver Bretz.

French firm Darrois Villey Maillot Brochier is taking the overall lead for EADS out of Paris, with corporate partners Bertrand Cardi and Alain Maillot taking the helm. Darrois competition partners Didier Théophile and Igor Simic are also advising.

Darrois originally won the mandate from the longstanding client, later referring the UK work to Clifford Chance.

EADS has also instructed Netherlands firm Nauta Dutilh for Dutch advice, with Amsterdam corporate partner Hein Hooghoudt leading the team, as well as Wall Street firm Wachtell Lipton Rosen & Katz, where corporate partner Adam Emmerich is advising on the US angle.

Freshfields senior partner and corporate specialist Will Lawes has taken the lead role for the UK’s BAE, with assistance from London corporate partners Piers Prichard Jones and Mark Austin and competition partners Alex Potter and Deirdre Trapp. Dutch and US partners from the firm are also understood to have been involved.

EADS, which is listed in Barcelona, Bilbao, Frankfurt, Madrid, Paris and Valencia, has instructed Clifford Chance on a number of occasions, while Freshfields is a longstanding adviser to London-listed BAE.

BAE said yesterday in a statement: “This potential combination would be implemented through the creation of a dual-listed company structure, under which both companies would operate as one group by means of equalisation and other agreements but would be separately listed on their existing exchanges. The discussions between the parties envisage that BAE Systems shareholders would own 40per cent and EADS shareholders 60 per cent respectively of the enlarged group.”

The companies are considering a unified management structure with “identical” boards and executive committees at the two companies, which have worked together on previous projects, including the Eurofighter and MBDA joint ventures.

Background to this deal:

Both companies are longstanding clients for their respective advisers. Freshfields corporate partner Mark Rawlinson – who is now London managing partner – led for BAE in 2006 on its possible takeover of Babcock International, which was eventually acquired by Linklaters client VT Group (17 April 2006). The group has also used Slaughter and May, with corporate partner Nigel Boardman advising on the 2006 sale of its stake in Airbus alongside French best-friend firm Bredin Prat (17 October 2006).

Clifford Chance has advised EADS for several years, including successfully defending it in an investigation between 2006 and 2009 by the French financial regulator, the Autorité des Marchés Financiers, over alleged insider trading related to delays to the Airbus A380.