A&O, Cleary lead on Euro banks mega merger

Allen & Overy (A&O) and Cleary Gottlieb Steen & Hamilton have led Kaupthing and JC Flowers through a €3bn (£2bn) banking takeover, despite rocky market conditions.

Icelandic bank Kaupthing acquired the Netherlands’ fourth-largest bank NIBC from a consortium led by JC Flowers.

A&O advised Kaupthing, with a team led by Amsterdam-based corporate partners Sietze Hepkema and Maarten Muller. A Cleary team led by corporate partner Michael McDonald along with Herbert Smith’s Dutch ally Stibbe took the lead roles advising JC Flowers. Slaughter and May’s best friend NautaDutilh nabbed a role by advising NIBC.

It will be the first Dutch presence for Kaupthing, which has been acquisitive of late. The bank first turned to A&O in 2005 when it acquired British bank Singer & Friedlander for £530m. A&O won that instruction because Kaupthing’s regular adviser, Slaughters, was advising Singer.

On debt financing Kaupthing has used DLA Piper, Lovells and Slaughters in the last year.

The NIBC deal involves a €700m (£474m) rights issue and a €200m (£135.5m) hybrid bond issue to finance Kaupthing’s cash part of the bid. A&O also advised on those aspects. The Flowers-led consortium, which bought NIBC in 2005, will still be the bank’s second-largest shareholder after the deal.

Muller told The Lawyer: “The lawyering was done in the context of difficult financial market conditions, so it took some courage and perseverance.”