Freshfields and Slaughters pocket lion’s share of £40m Shell-BG fees

Freshfields Bruckhaus Deringer and Slaughter and May have pocketed a vast proportion of the $59.2m (£40.25m) legal fees incurred by both Royal Dutch Shell and BG Group during their merger.

Royal Dutch Shell announced its takeover of rival gas company BG Group last April, in which BG shareholders will be entitled to receive 383p in cash for each BG share and 0.45 of a Shell B share.

The transaction, worth approximately £47bn, has seen a number of law firms win work, with Freshfields and Slaughters acting as lead advisers for BG and Shell respectively.

Shell’s legal fees are estimated to amount to between $32m and $35m (£21.7m to £23.8m) and Slaughters is expected to pick up a significant proportion of this.

Slaughters partners Roland Turnill, Hywel Davies and Rebecca Cousin have been acting on the deal for over a year now, while Cravath Swaine & Moore, De Brauw Blackstone Westbroek and Allens have picked up mandates in the US, the Netherlands and Asia-Pacific.

Brazilian firms Souza Cescon Avedissian Barrieu & Flesch and Pinheiro Neto Advogados have also been involved, with Allen & Overy and Ashurst acting on the financial side for Bank of America Merrill Lynch.

The fees are higher for the buyer Shell, which had to turn to Slaughters on financing aspects of the deal and raising cash. Slaughters also had to work on the company’s prospectus and was tasked with setting up complicated dividend access arrangements.

On the other side, BG’s legal costs are estimated to be between $22.4m to $24.2m (£15.2m to £16.45m).

Lead adviser Freshfields is understood to be taking home over 50 per cent of the fees, with partners Mark Rawlinson and Graham Watson acting as lead partners. The magic circle firm was assisted by King & Wood Mallesons, Lee & Ko and Mattos Filho.

The fees stand out as being some of the largest ever recorded on a M&A deal, exceeding those spent on Glencore’s combination with Xstrata in 2013. On this deal, with Freshfields again picking up the lion’s share, the legal fees were initially estimated at £24.8m, but increased to £38.9m in the second set of scheme documents.

Shell’s takeover of BG is set to be the largest ever UK-to-UK merger but the transaction has thrown a number of complexities into the mix.

The deal is a cash and share offer, which has required various pre-conditional regulatory approvals from around the world. With these now completed, the companies now need shareholder approval set for 15 February.