CC Pünder advises RAG in landmark German deal

Clifford Chance Pünder is advising German coal group RAG Aktiengesellschaft on what is set to be the largest cash deal yet under the new German takeover code.
RAG is offering German utility Eon its 18.4 per cent stake in Ruhrgas, Europe’s largest gas importer, in exchange for Eon’s majority holding in Degussa, a specialist chemicals company.
RAG will acquire 51 per cent of Degussa for e38 (£24) per share, a total of around e3.9bn (£2.5bn). In return, Eon will receive RAG’s stake in Ruhrgas, valued at around e2bn (£1.3bn), and a syndicated bank loan for the difference in the value of the two companies.
“It’s a very complex transaction,” says Johannes Perlitt, the partner leading the deal for Clifford Chance. Perlitt is being assisted by fellow partners Philipp von Ilberg and Thomas Stohlmeier. Ilberg is advising on financing and Stohlmeier on takeover issues. Shearman & Sterling partners Georg Thoma and Hans Diekmann are representing Eon.
The e2bn syndicated bank loan is being arranged by Morgan Stanley and Deutsche Bank, with Morgan Stanley acting as the sole financial adviser on the transaction.
White & Case and Hengeler Mueller are both acting for Morgan Stanley on the financial advisory work, with White & Case also acting for the bank on the financing side. Frankfurt partner Annica Lindegren is leading the deal for White & Case, with assistance from Albrecht Muench in Frankfurt and Mike Goetz and Magdalene Bayim-Adomako in London. Torsten Busch is lead partner for Hengeler Mueller.
Senior legal counsel Joachim Walgenbach is leading the deal for Deutsche Bank, with the assistance of Freshfields Bruckhaus Deringer partner Yorck Jetter.
The deal has been the subject of much media speculation. “Not only is it the highest cash offer under the new German takeover code, it’s also evidence that the unwinding of the large German industrial companies is beginning,” said White & Case partner Goetz.
However, it is still dependent on a decision by the German Ministry of Economics as to whether it is fair on competition grounds. So far, the German cartel office has blocked a full takeover of Ruhrgas by Eon.
“It’s a very sensitive deal, as Eon has arrangements with other shareholders,” said Perlitt. Eon has already lined up a number of other transactions with other Ruhrgas shareholders such as BP and Vodafone. It is understood that Eon seeks to gain an overall 40 per cent stake in the coal group.
Eon is still awaiting a decision from the ministry on a proposed deal with one of the other stakeholders, which was originally blocked by the cartel office. If that is approved, the RAG deal looks set to continue unimpeded. The decision is expected in July.