For a market that has experienced some of the worst of the global financial crisis – with Moody’s recently slashing its credit rating to A3 – there continues to be a surprising amount of interest in Spain from UK law firms.
Way back in the 1980s and 1990s, many UK firms opened offices there. Clifford Chance was the trendsetter, setting up shop in Madrid in 1980, with Allen & Overy (A&O) and Freshfields Bruckhaus Deringer doing so over a decade later in 1991.
Linklaters followed in 1999, while Slaughter and May added local firm Uría Menéndez to its ’best friends’ network in 1998. Ashurst added a Madrid outpost in 2001. In 2004 Eversheds added Spanish firm Lupicinio Abogados to its international network, but ditched it for Spanish rival Nicea Abogados in 2011. Herbert Smith opened in Madrid in 2009 and is one of the few firms to have launched an office there since the crisis began.
Despite the country’s economic woes, The Lawyer consulted data from Thomson Reuters which showed that a number of UK firms have profited from the large number of companies that engaged in M&A in Spain between 2007 and 2011.
Clifford Chance, Freshfields and Linklaters are the three that have consistently appeared on the country’s top deals list. Clifford Chance and Freshfields clocked up 104 and 107 M&A deals respectively between 2007 and 2011. Linklaters is not far behind, having acted on 92 deals over the same period.
Unsurprisingly, the three firms were retained for one of 2011’s largest transactions, which saw Linklaters advise UAE state-owned IPIC on its takeover of Spanish oil company Cepsa. Clifford Chance assisted IPIC with raising the necessary financing to acquire the outstanding 48.8 per cent stake in Cepsa from French energy group Total. Freshfields, alongside Latham & Watkins, advised Total on the deal which was valued at €7.5bn (£6.2bn).
Clifford Chance has a strong record in Spain, winning key energy clients such as Spanish giant Endesa. It steered the company through a three-and-a-half-year saga that eventually concluded in 2009 when Italy’s Enel acquired a 25 per cent stake in the Spanish company from Acciona for €11.1bn. A&O, Linklaters and Freshfields were all retained on other parts of the big-ticket deal.
Elsewhere in the energy sector Freshfields has been a longstanding adviser to Gas Natural and advised the company on five M&A deals in 2008, one in 2009 and two in 2010. This included advising the gas giant on the purchase of a 45 per cent stake in Unión Fenosa and Unión Fenosa Generación.
While A&O has been a constant presence in the Spanish market and won roles in the Endesa and Gas Natural deals, its dealcount falls short of its three magic circle rivals, at 43 deals between 2007-11.
Meanwhile, the data shows other firms have had less of an impact on the market, with Ashurst acting on only 18 deals over this period.
On the other hand, Herbert Smith proves that having a presence on the ground has its advantages: prior to opening an office there in 2009 the firm failed to make the deals list. In 2010, however, it advised on at least four deals and a further 10 in 2011.