French govt looks to Herbert Smith for Snecma sale advice

Herbert Smith has scored a first-time instruction from the French government to advise on a unique privatisation.

A team from the firm’s Paris office, led by corporate partner Frédéric Grillier and consultant Anne Maréchal, has been working on the disposal of state-owned Snecma to French public company Sagem.

It is the first time Herbert Smith has advised the French state. The firm won the work following a recommendation from the investment banking arm of HSBC, the government’s financial adviser.
The deal, which was announced at the end of October, sees the merger of communications and defence company Sagem with aerospace corporation Snecma.

The French government owned 62.2 per cent of the Euronext-listed Snecma, with the remainder held by the French public, Snecma employees and industry rival UTC.

Sales for the two companies total more than €10bn (£7bn), and the merger creates one of Europe’s largest defence and communications organisations.

Grillier said the transaction, in which a company has been privatised as a result of a public offer, is the first of its kind in France. The Herbert Smith team had to make the privatisation element of the deal and the merger work together.

The merger, approved on 8 November by Snecma’s board, is therefore taking place in two stages. Initially, Sagem will make a public offer for all of Snecma’s shares with a ceiling of €1.25bn (£870m). This offer is subject to approval by the French Stock Exchange and other regulatory authorities.

The merger will be completed on the approval of both companies’ financial statements for 2004.

“There was a high level of involvement of the state and its advisers at all stages of the transaction,” Grillier said, adding that the
work is a step forward for Herbert Smith’s French public law practice.

Bredin Prat’s Philippe Beurier and Patrick Dziewolski advised Snecma on the deal, with Bernard Vatier of Vatier & Associés advising Sagem.