DEAL OF THE WEEK – HSBC/HOUSEHOLD INTERNATIONAL

Cleary Gottlieb and Norton Rose get M&A boost from HSBC deal

Cleary Gottlieb Steen & Hamilton and Norton Rose have secured themselves a strong showing in M&A tables by advising long-time client HSBC on its $14bn (£8.81bn) acquisition of Household International.

The deal is the largest cross-border transaction this year and, subject to the usual shareholder and regulatory approval, is expected to close in the first quarter of 2003.

Cleary Gottlieb corporate partner Paul Shim, who led the deal with partner Victor Lewkow and HSBC US general counsel Paul Lee, said: “It's a very opportunistic deal for HSBC, giving them enormous presence in the US and quite a unique and well-established marquee franchise in Household.”

Norton Rose partner Martin Scott said: “Notwithstanding the fact that the M&A market has been dead, there's still consolidation in this field, and where there are deals to be done, they'll be done.” Scott led the deal on the UK side with partner Nick Adams and HSBC general counsel Richard Bennett. HSBC company secretary Ralph Barber and his team also had heavy involvement at the London end.

Household, which is the largest independent consumer finance company in the US, turned to its usual M&A counsel Wachtell Lipton Rosen & Katz, with financial institutions partner Ed Herlihy leading the team. Household's fortunes have long been linked with Wachtell – it was for Household that the New York firm first formulated the celebrated poison-pill defence back in the 1980s.

Although one of the heftiest this year, the deal was technically straightforward, though there were some issues to be dealt with surrounding Household's securities, some of which were preferred stock in addition to common stock.

Norton Rose and Cleary Gottlieb have exceptionally strong ties with HSBC. Both have advised on a string of acquisitions for the bank, from Republic National Bank three years ago, then Credit Commercial de France (CCF) and, earlier this year, Grupo Financiero Bital. The US firm also retains strong relationships with HSBC in Europe through London partner Ed Greene, who advised the bank on its US listing.

Norton Rose will also be cheered by the fact that some input was required on the Hong Kong side. Led by partner David Stannard, the deal will undoubtedly boost Norton Rose's fledgling practice there. The City firm had to close its Hong Kong office more than five years ago after the ending of its joint venture with Johnson Stokes & Master, and, after a period where it was banned from practising in Hong Kong, has only just reopened.