Stellar laterals and global coverage sees firm win big Disney, eBay deals. By Julia Berris
Dewey & LeBoeuf’s corporate group has got the autumn off to a flying start by securing two high-profile M&A mandates.
Dewey M&A head Mort Pierce led Disney on its $4bn (£2.46bn) acquisition of Marvel Entertainment. The deal was announced last Monday (31 August), a day before partners Richard Climan and Keith Flaum led a team advising eBay on the $1.9bn sale of Skype.
Both deals are the result of longstanding relationships. Pierce has been a close adviser to Disney for years, while Climan and Flaum brought eBay with them when they joined from Cooley Godward Kronish in July.
Dewey’s M&A team has become a well-established fixture of the US market, with the likes of Pierce and US M&A co-head Alex Dye featuring heavily on major deals in recent years.
Although the downturn has slowed dealflow, Dewey has been among the more successful US firms. Mergermarket’s global M&A survey for the first half of 2009 shows that the US firm has jumped from 25th to twelfth place in the global deals value table.
But it takes more than established veterans to maintain a vibrant M&A practice. Although the usual suspects still lead the practice, Dewey is carefully cultivating the next generation
of stars in the hub of its M&A practice – New York.
Teaming up with Pierce, junior partner Chang-Do Gong has played a vital role in maintaining the firm’s relationship with Qatar Telecom. In January Gong and Pierce worked together advising Qatar Telecom on its $860m acquisition of Indonesion company Indosat.
“The emphasis is really on cross-border,” says Pierce. “The Qatar deal is a good example of this. It originated in Doha, but a lot of work in our New York office went into the deal. But it’s important to have a quality team not just in New York, but across the network.”
Pierce stresses that, although Dewey is headquartered in New York, the firm operates a global M&A team that has made significant strides in recent years.
Last week’s eBay deal illustrates the growing prominence of Dewey’s Silicon Valley coverage. Climan was one of the biggest hitters at Cooley. As part of his team Flaum has proven himself to be a very promising junior partner, taking a lead role on the Skype sale.
But not everyone is convinced that Dewey’s M&A practice is genuinely top tier.
“Dewey has for a long time tried to break into the elite circle in New York,” claims a partner at a rival Manhattan firm. “The reality is that if these two deals had been announced two or three years ago no one would have noticed. Disney was always going to be Dewey’s deal and eBay is fortuitous considering the moves earlier this summer.”
Dewey may have been lucky, but the firm is clearly smart in its lateral hiring strategy and knows how to develop a practice across offices.
Dewey’s international strategy has certainly advanced in recent years. Last year the firm launched three offices in the Middle East in Dubai, Abu Dhabi and Qatar.
The firm’s international expansion is crucial to the M&A team. The 2007 merger of Dewey Ballantine and Leboeuf Lamb Greene & MacRae has created a network spanning the globe, giving the M&A team a strong platform.
“The merger combined LeBoeuf’s Russia, CIS and Middle Eastern network with Dewey’s good European network,” says Dewey London M&A head Joe Ferraro. “It’s created a very good foothold internationally for M&A, and that’s what the firm wants to emphasise.”
In July the firm advised AIG’s consumer finance business in Poland on its tie-up with Santander. London-based partner Steve Horvarth led the team advising AIG.
But although Dewey has made progress in developing a global M&A practice, the firm has suffered some setbacks.
In 2007 rising star Michael Aiello defected to Weil Gotshal & Manges’ New York office ahead of the merger. With an impressive roster of clients, including MGM Mirage, AIG and Sony, Aiello has proven to be a big win for Weil and a big loss for Dewey.
“Would Mike have gone to Weil now?” asks one Manhattan-based partner at a rival firm. “Perhaps not. But he’s considered to be an up-and-coming partner in New York and I suspect he’s missed at Dewey.”
Although Dewey has suffered the loss of the occasional key partner in New York, Pierce remains confident it has the right junior partners coming through the ranks to build a pre-eminent global M&A practice.
“All of our offices stand alone,” says Pierce. “They’re not service offices, and I think this is what’s given us an edge over the past few years. It’s clearly been challenging in recent years, but we’ve worked hard at building relationships over the years before the downturn.”
Like it or not, Dewey is not yet one of the elite New York firms. It has a long way to go before it can sit comfortably with the likes of Sullivan & Cromwell or Skadden Arps Slate Meagher & Flom in the M&A world.
But its high-profile lateral hires and bold international expansion have certainly paid off. For Dewey, the downturn has created some opportunities that it has not been afraid to take.
Dewey’s UK M&A strategy
Dewey & LeBoeuf’s UK practice is centred around the emerging markets.
Since the 2007 merger of Dewey Ballantine and LeBoeuf Lamb Green & MacRae the US firm has divided its London practice into regional desks to make the most of the firm’s global network.
“Emerging markets is the key,” says London corporate head Joe Ferraro. “The combined firm gave us a fantastic network in Europe and emerging markets and our M&A team in London works closely with those offices.”
Partners in the M&A group, which contributed 25 per cent of London’s office revenue in 2008, are focused on various international jurisdictions.
By far the most successful team in London is the Russia-focused team.
Led by M&A veteran Brian Zimbler, the Russia-focused team is made up of three rising stars – partners Simon Briggs, Dan Coppel and Igor Krivoshekov have been vital to London’s development.
Coppel led a team with Moscow-based partner Jonathan Hines on Eni’s $4.2 billion sale to Gazprom of a 20% stake in Gazprom Neft in April.
“Geographically we’re very well-placed,” insists Ferraro. “We clearly do work that is UK-focused, but I think the appeal for us is the emerging markets sector.”
Earlier this year Zimbler led a team from Dewey in London advising CNPC Exploration and Development on its investment in Kazakhstan oil producer JSC Mangistaumunaigas.
Dewey has come a long way since the 2007 merger. Although some may view it as a mid-tier US firm, it has proved it has global ambition. It also has the right partners on board to keep moving up the M&A ranks.