When it comes to potentially tricky public company M&A, the number one firm to turn to in the US – maybe the world – is Wachtell Lipton Rosen & Katz. And that blunt assessment is as true in the energy and natural resources sectors as it is in any other.
Not that that means Wachtell is top of the energy heap. The firm leads the pack for complex, big-ticket public M&A (it’s no slouch when it comes to bankruptcy and litigation either) but forget about it maintaining anything so vulgar as an energy department. That’s not Wachtell’s style.
What you go to Wachtell for is bet-the-company M&A, not an industry focus. Rarely has that statement been proved truer than in the firm’s year-plus-long defence of industrial gas company Airgas in its bitter takeover battle with rival Air Products, represented by Cravath Swaine & Moore.
In February, Wachtell’s team, headed by litigator Marc Wolinsky, won the day after relying on the poison pill defence created 30 years earlier by name partner and M&A legend, Marty Lipton. The case typified Wachtell’s approach and style.
“We have the deep relationships with the industry, but if it’s volumetric production payments [a long-established means of financing in the oil and gas industry] you’re doing then you don’t hire us for that,” admits one Wachtell partner.
So, the current vogue for a sectoral approach is not Wachtell’s style, and neither is opening a slew of offices in a bid to jump on the current energy and natural resources bandwagon.
One of Wachtell’s unique selling points – and one that helped it co-counsel with the likes of Baker Botts, its running mate on the $7.1bn acquisition by UK offshore drilling business Ensco of US rival Pride (another Katz deal) – is its single office approach. As firmwide co-chair Dan Neff told The Lawyer earlier this year, what most firms view as a challenging strategic issue, Wachtell sees as a positive.
“Because we don’t have an office in Houston, the firms that are headquartered there are often more comfortable working with us than with other firms that have local offices,” Neff says. “Houston’s a place where relationships matter and we’ve been there for so long. I’ve been going there for 25 years, and I believe at this stage David [Katz] and I are known quantities.”
Wachtell’s deal list over the past year or so tells the story of a unique transactional machine that has capitalised both on its reputation and its longstanding relationships with key players in the, primarily US, energy market.
Wachtell represented Smith International in its $11bn merger with Schlumberger; Mirant in its $3.1bn merger with RRI Energy to create GenOn Energy; Newmont Mining in its $2.3bn acquisition of Fronteer Gold; Consol Energy in its $3.5bn oil and gas assets acquisition from Dominion Resources; and Duke Energy in its $26bn merger with Progress Energy.
Elsewhere a couple of particularly active clients kept Wachtell’s lawyers busy. The New York firm advised Chesapeake Energy Corporation, a client relationship stretching back more than a decade, in its $315m acquisition of Bronco Drilling, in its $4.7bn asset sale to BHP Billiton Petroleum and in its $2.1bn asset sale to CNOOC.
Wachtell partners Katz and Neff traditionally play the key roles in maintaining the relationship with Chesapeake, which, thanks to its commitment to deleveraging, has become one of the US’ most active energy clients over the past couple of years. ConocoPhillips is another key relationship, maintained primarily by Andy Brownstein and Lipton.
Wachtell also advised on a string of other energy-related deals over the past year, including a batch for Atlas Energy. It advised the company in its $4.3bn acquisition by Chevron, its related acquisition of Atlas Pipeline Partners’ interest in Laurel Mountain Midstream for $403m, and the sale of certain upstream oil and gas assets to Atlas Pipeline Holdings for $250m.
Andy Brownstein, David Katz,
Marty Lipton, Dan Neff
Top three sectors
Oil and gas
Mining and minerals
Top geographical region
Duke Energy’s $26bn merger with Progress Energy
Client: Duke Energy
Lead partner: Steven Rosenblum
Smith International’s $11bn merger with Schlumberger
Client: Smith International
Lead partners: Dan Neff, David Shapiro
Year-long takeover battle between Airgas and Air Products
Lead partners: Dan Neff, David Katz