IFLR 1000
The Guide to the World's Leading Financial Law Firms

The past year saw Sullivan & Cromwell complete several deals under Rule 144A/Reg S. The highlights include advising Asciano Limited, in senior guaranteed notes offering of $1 billion in two tranches, and assisting both Woolworths and Telstra Corporation in senior unsecured notes offerings of $850 million and $1 billion respectively.

The highlight of the year though was advising Midwest in the $335 million high-yield project bond offering. This transaction could be potentially ground-breaking, as no project finance bank offering previously in administration has gone through without any parent guarantees.

This past year was particularly important for Sullivan & Cromwell as they launched their Hong Kong law practice with the hiring of capital markets partner Kay Ian Ng and counsel Gwen Wong. Kay Ian Ng, formerly a managing partner at Freshfields, brings deep experience in Hong Kong law-related capital markets practice and should allow Sullivan & Cromwell to quickly develop a top Hong Kong law practice. "Sullivan & Cromwell has always been top in select US-related transactions for clients," says a partner at a rival firm. "They aren't the biggest shop in town, but they're known for quality. The will be a firm to watch as they develop their Hong Kong law practice."

The firm has particular expertise in privatisation transactions, which may position the firm well in the years ahead as a dearth of Chinese companies seem to be contemplating the US de-listing process.

Recently the capital markets team represented underwriters William Blair & Co and Oppenheimer & Co in the Nyse China-based commercial vehicle wheel manufacturer China Zenix Auto International (China Zenix). China Zenix raised approximately $77.4 million in the New York listing and it plans to use the proceeds to expand and build its business and factories.

The capital markets group also advised Goldman Sachs, China International Capital Corporation, Deutsche Bank and Credit Suisse as the underwriters in the $2 billion H-share listing of Shanghai Pharmaceuticals Holdings (Shanghai Pharma) on the Hong Kong Stock Exchange. Shanghai Pharma is China's second-largest drug distributor, with myriad research, manufacturing, distribution and retail outlets. At the time of offering, the Shanghai Pharma was the largest Hong Kong IPO of 2011.

Clients of Sullivan & Cromwell have especially high praise for partner Michael DeSombre and his team. As one client tells us: "We've worked with Michael DeSombre's team in Asia for more strategic transactions. He is a very good negotiator and looks after our interests. The team is very dedicated to business demands, and we were really glad to work with them."

In 2011 DeSombre advised Goldman Sachs in entering into a definitive agreement relating to its proposed acquisition of the remaining 55% of the shares that it does not already own in its Australian joint venture, Goldman Sachs & Partners Australia (GS&PA). The agreement sets forth the terms on which Goldman Sachs is expected to make an offer to former and current GS&PA employee shareholders so that they may purchase their shares for an undisclosed amount.

Sullivan and Cromwell also advised Goldman Sachs Asset Management, by way of its Indian subsidiary and Goldman Sachs Trustee Company (India) on a sale and purchase agreement for a strategic acquisition of all the outstanding shares in Benchmark Asset Management Company and Benchmark Trustee Company.

Desombre also led the team in advising Philippine Long Distance Telephone Company (PLDT) on its pending $1.7 billion acquisition of Digital Telecommunications Philippines (Digitel), regarding matters that deal with US securities law.

In January 2011, S&C represented Hanwha Corporation (Korea) in its investment into Komodo Enterprises, which was doing business as Solar Monkey in the US.

Sullivan & Cromwell joined many of its US contemporaries last year in launching a local Hong Kong law practice. This was achieved through the hires of Kay Ian Ng and counsel Gwen Wong from Freshfields. Whereas in the past the firm had to use local counsel for Hong Kong law work, the new practice will allow it to compete on par with its feels. Thus, this next year should be an interesting one in the history of the firm. Ng is a particular coup having been a former managing partner of Freshfields' Asia operations.

Because of its strength in US law, Sullivan & Cromwell has particular expertise in privatisation transactions, with more and more Chinese companies looking at de-listing from US exchanges, such a strength will no doubt prove useful in the years to come if such a trend continues.

Having said this, the firm has also worked on substantial mandates for Chinese companies who are still willing to take a chance on the hostile US markets. One such example saw the team representing underwriters William Blair & Co and Oppenheimer & Co China Zenix Auto International's (China Zenix) US listing which raised approximately $77.4 million.

On the home market the firm acted for underwriters Goldman Sachs, China International Capital Corporation, Deutsche Bank and Credit Suisse on Shanghai Pharmaceuticals Holdings (Shanghai Pharma) $2 billion listing on the Hong Kong Stock Exchange, which for a time was the largest Hong Kong IPO of 2011.

Though Sullivan & Cromwell isn't one of Hong Kong's largest firms in terms of numbers, the high quality of the firm's partners and associates makes them an established presence in Hong Kong. As with the capital market's practice, the firm's strategy of focusing on a few complex, high-profile deals has been successful in the Hong Kong arena.

Sullivan & Cromwell's clients have high regard for partner Michael DeSombre and the S&C team. One client notes that: "We've worked with Michael DeSombre's team in Asia for more strategic transactions. He is a very good negotiator and looks after our interests. The team is very dedicated to business demands, and we were really glad to work with them."

Sullivan & Cromwell has considerable regional reach from its Hong Kong office. DeSombre recently led S&C's team in representing Goldman Sachs as it entered into a definitive agreement relating to its proposed acquisition of the remaining 55% of the shares that it does not already own in its Australian joint venture, Goldman Sachs & Partners Australia (GS&PA).

This year, Sullivan & Cromwell's team has also done M&A work in the Philippines, India and Korea.

Sullivan & Cromwell's private equity team in China is supported by the firm's worldwide abilities in M&A and capital markets. Sullivan & Cromwell's team is not the largest group of private equity lawyers in Hong Kong, but the team does work on select number of transactions for major private equity houses. Sullivan & Cromwell's fund formation practice is also correlated with its private equity work.

Clients praise the firm's private equity offerings. "I've worked with Michael DeSombre's team in Asia for private equity and strategic transactions," one client told us. "He's a very good negotiator, and looks after our interests. His team is very dedicated to business demands, and we're really glad to work with them."

Recently, Sullivan & Cromwell's private equity team advised Telstra on the sale of its SouFun Holdings shares. Telstra sold a portion of its remaining shares in leading Chinese real-estate advertising Internet portal SouFun concurrently with the IPO and NYSE listing of SouFun. Telestra sold its shares to private equity funds managed by Apax Partners and General Atlantic, as well as two existing shareholders of SouFun.

Sullivan & Cromwell acted as US counsel to the issuer Tata Motors in its $750 million offering of Class A ordinary shares and ordinary shares by way of a US Rule 144A/Reg S institutional private placement outside the US and India, and in an institutional placement in India. This transaction was completed in October 2010.

The managing director of a large domestic investment house says: "My first choice would always be to work with Sullivan & Cromwell. It is very reliable, knowledgeable and well-coordinated." Small, but packing a powerful punch, the venerable Wall Street firm remains at the top of the securities game in Japan. Few practitioners in the market garner as much praise and respect as star partner Izumi Akai. "Mr Akai has a very good character, the smarts to proceed a deal with deep consideration of Japanese business culture, and he takes care of all top management concerns and interests," says a corporate client. The dual-qualified Akai and his team, including partner Garth Bray, have had a very busy year with peers acknowledging their presence on a number of coveted mandates. "The quality of advice and the responses are excellent," says another loyal client.

Sullivan's strong underwriting portfolio is highlighted in its work on Japan Finance Corporation's (JFC) and Mizuho Financial Holdings' global offerings. JFC is a key client of Bray's. The latter of the two deals saw Akai advising the underwriters as to US law in Mizuho's ¥690 billion ($8 billion) global offering of its common shares. In particular, the execution was challenging as the offering was launched during unstable economic and market conditions. Akai and the other lawyers acting on the transaction had to structure the offering so that it was convincing to investors but at the same time, was clear about risks involved. Over the past five years, league tables have illustrated the firm's dominance in completing SEC-registered and Rule 144A offerings by Japanese issuers - this year it boasted a staggering 50% of all those done since 2006.

Though New York firm Sullivan & Cromwell is best-known for its capital markets practice, the firm has a respectable banking practice in Tokyo.

Izumi Akai and Garth Bray, co-heads of the firm's banking practice, acted for Sumitomo Trust and Banking Company and Chuo Mitsui Trust Holdings as they completed their business combination through a $7.7 billion share exchange. Sumitomo Trust and Banking became a wholly owned subsidiary of Chuo Mitsui Trust Holdings, which then changed its name to Sumitomo Mitsui Trust Holdings.

Sullivan & Cromwell's M&A practice continues to punch above its weight, scoring leading roles on precedent-setting and high-value mergers, acquisitions, joint ventures and strategic investments. The Wall Street firm promoted Keiji Hatano to the partnership at the end of 2010, boosting the Tokyo partner numbers to three.

Izumi Akai is highly acclaimed by peers and clients and his deal list is punctuated repeatedly by transactions such as the $9.7 billion Panasonic acquisition of Panasonic Electric Works and Sanyo Electric. He advised Panasonic on the US tender offer rules. Hatano led a global team that advised Mitsubishi UFJ Financial Group on its $9 billion joint venture investment with Morgan Stanley.