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Norton Rose has joined a raft of Chinese and South African firms advising on Rio Tinto Group’s $373m (£231m) sale of its stake in South Africa’s Palabora Mining to a consortium led by China’s Hebei Iron & Steel Group.
Norton Rose’s transaction team advising Rio Tinto was headed by London-based corporate partner Raj Karia and Johannesburg-based corporate director Alastair Dixon. The firm worked closely with Rio Tinto’s in-house team led by London-based legal counsel Alexander Chmel.
Hebei, headquartered in Shijiazhuang and listed in Shenzhen, led the purchasing consortium, which consists of Industrial Development Corporation of South Africa, General Nice Development and Tewoo Group.
The Chinese consortium members instructed Beijing-headquartered JT&N as lead counsel, with the firm’s Beijing-based corporate partners Annie Wu and Zheng Xiaodong the partners at the helm.
South Africa’s Werksmans Attorneys, fielding Johannesburg-based mining and resources head Chris Stevens and director Greg Nott, acted as the Chinese consortium members’ South African counsel.
IDC turned to South African firm Edward Nathan Sonnenbergs.
According to the consortium, the transaction reflects the attractiveness of the South African mining sector and is a sign of confidence in the investment potential of South Africa and the African continent.
At the same time, the consortium will also acquire a 16.8 per cent stake in Palabora Mining from Anglo American for $103m ($63.9m). Anglo is understood to have relied on in-house lawyers for advice.
Upon the completion of the deal, the consortium will hold a 74.5 per cent stake in Palabora, whose principal asset is a copper and magnetite mine in Palabora, South Africa.
The transaction is subject to various regulatory approvals and is expected to close in the next four to six months.
Wu of JT&N said: “This role has required us to manage every aspect of the deal while dealing with multiple government entities and global conglomerates, including South Africa’s sovereign fund and Rio Tinto.”
Background to this deal:
South African firm Deneys Reitz merged with Norton Rose on 1 June 2011 (22 November 2010). Most recently, Norton Rose’s Johannesburg office advised the restructuring of Rio Tinto and BHP Billiton’s shareholdings in, and the empowerment transaction relating to, Richards Bay Minerals. Through the deal, Rio Tinto doubled its holding in Richards Bay following its acquisition of BHP Billiton’s entire interest in it for $1.7bn. Dixon was also one of the main partners on that transaction.
JT&N is a regular adviser to Chinese state-owned companies and increasingly on their outbound transactions. Prior to the Hebei deal, the firm, also led by Wu, advised Aluminum Corporation of China on its proposed Can$925m acquisition of up to 60 per cent of the shares in Toronto and Hong Kong dual-listed SouthGobi Resources (18 September 2012).
For more on Chinese outbound M&A and the trend for Chinese state-owned enterprises to retain large Chinese firms as lead counsel, see City analysis