The value of mergers and acquisitions work is hitting new heights although there has been a slight decrease in the number of deals of more than IR£5m in the past year. A survey carried out earlier this year by Finance magazine shows the value of transactions rocketing by 100 per cent to IR£4.1bn in 1996 from IR£2.1bn the previous year, although the number of deals in the same period declined from 74 to 72.
The survey reveals that Arthur Cox was the leading Irish legal adviser for 1996 with the firm advising 37 companies – both those acquiring and those being acquired – in deals worth almost IR£1.5bn. William Fry represented the highest number of deals for both acquirers and targets, while McCann Fitzgerald had the highest value of deals for target companies at IR£388m on eight transactions.
“The mergers and acquisitions side is extremely active for us,” says Arthur cox managing partner James O'Dwyer. This year the firm is already involved in advising Avonmore Foods on its merger with Waterford Foods in a deal valued at around IR£280m.
It has also acted with Herbert Smith in Tesco's acquisition of the Power Supermarkets businesses for UK£630m from Associated British Foods, subject to EU clearance.
McCann Fitzgerald, second in the survey, was involved in Independent News' £184m acquisition of New Zealand's Wilson & Horton and Nale Labs' acquisition of US company Warner Chilcott for IR£90m.
A&L Goodbody, the third-placed Irish firm in the table, looks set to have a busy year ahead. It recently acted in US video hire giant Blockbuster's acquisition of the Irish Xtravision chain.
The practice is also preparing for the recently announced flotation of Ryanair on Nasdaq and the Dublin Stock Exchange, which aims to raise between IR£89.4m and IR£105.6m.
Of the 72 deals listed in the survey, more than half involved a foreign acquisition by an Irish company while 14 involved a foreign company acquiring an Irish company.
But such a high level of international activity is not always good news for Irish law firms. Many are indignant at the way in which Irish companies and the Irish government automatically turn to foreign legal practices for the bulk of advice on some of the deals.
For example, Irish firms were particularly infuriated when the Irish government appointed US practice Skadden Arps Slate Meagher & Floms to act for it in the disposal of its interest in Irish Life. Another more recent example is Denton Hall's coup in being chosen to advise the Irish government on its review of the electricity supply industry.
“It's very bad,” says William Fry managing partner Brian O'Donnell. “Those responsible for the giving of this work in Ireland have given it to overseas firms.” Consequently, Irish firms have to compete with English and New York firms, he adds.
Although the bulk of the work is going to the top firms, some of the medium-sized firms are also getting a look-in. Declan Moylan, of Mason Hayes & Curran, claims his firm has made “serious inroads” into acting for UK plcs.
He says the practice has had 20 good deals in the past year with one of the most significant being the acquisition by Thomsons of Budget Travel, which was owned by Granada. MHC acted for Granada while McCanns acted for the acquirers. And the firm also acted for San Francisco company Dole Food Co in its acquisition of Fyffes's South American interests for IR£16.4m.
Meanwhile Gerrard Scallan & O'Brien says it dealt with nine transactions of more than £5m, with an overall value of IR£80m. The addition of some smaller transactions brings the total value up to IR£195m.
deals involving foreign firms
Slaughter and May advised the Bank of Ireland in its IR£582m acquisition of UK building society Bristol & West.
SJ Berwin acted with Arthur Cox on Fyffes's IR£147.5m acquisition of UK firm Geest Bananas.
Ashurst Morris Crisp was the lead firm on MBO & LGV/Barings' acquisition of Irish company CMI.
Arthur Cox acted with Simmons & Simmons and Clifford Chance on the First National Building Society's acquisition of the Mortgage Corporation.
Macfarlanes acted with McCann Fitzgerald on Irish company Kingspan's acquisition of UK firm Ward Buildings.
Gouldens acted for Irish company Phoenix Coal in its takeover of UK firm PD Fuels.
US practice Cahill Gordon & Reindel acted with McCann Fitzgerald when Elan Corporation took over US firm Athena Neurosciences for IR£406m.