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

Hengeler Mueller is one of the top two leading German firms. It is very highly reputed, advising the biggest German clients. Peers have noted its recent role in aviation related matters and in competition matters arising directly from the financial crisis.

The firm has a team of seven partners spread between Brussels and Düsseldorf, with one partner in Frankfurt, the most active of which are Hans-Jörg Niemeyer, Alf-Henrik Bischke and Thorsten Mäger.

Within the aviation sector, recent transactions saw the firm advise Austrian Airlines on state aid matters and on merger procedures for a sale to Deutsche Lufthansa, and defend both Lufthansa and Austrian Airlines against an attempt by NIKI Lufthart to overturn a Commission decision on state aid to the two airlines.

Niemeyer also advised WestLB on two state aid proceedings before the Commission; the state aid had been granted to help the bank restructure and Bischke helped Brambles get clearance for its acquisition of IFCO Systems. In a European cartel case, Bischke also represented N.N. in investigations into the computer monitor tubes business.

The firm acted on a number of national cases with global reach. Led by Mäger, was busy advising BHP Billiton at a phase two investigation into a joint venture with Rio Tinto to exploit iron ore reserves in Western Australia (German merger control), and Akzo Nobel in a damages claim by CDC following the bleaching cartel investigation.

Involved in more headline deals than any other firm over the last 12 months, the German independent continues to hold its own against international counterparts. Hengeler Mueller's equity capital markets team were mandated on some of the most interesting and substantial capital increases the market has seen since the crisis.

Clients admit the firm is not cheap but consistently feel they get value for money. "In my personal opinion Hengeler is the best," says a client. "They're the best educated, right away they know what you're talking about, they're pragmatic and try to find the best solution for the customer." Another client says: "They are wonderful, probably the best firm in the German market," but adds a caveat: "For certain transactions, like 144A offerings, they have to use partner firms, which is clearly a disadvantage. They can't offer it under their own brand name which makes things more complicated sometimes."

Commerzbank's €11 billion increase in April 2011, necessitated by Basel III requirements, but also forming part of the bank's strategy to repay €14.3 billion of the state aid received during the crisis, was one of the largest capital markets deals in German history and a highlight for Wolfgang Gross, who acted as counsel to the bank.

The firm also advised Porsche Holding on its €5 billion capital increase, while Torsten Busch, who one peer calls "one of the five leading equity capital markets lawyers in Germany", led a team advising a syndicate of 36 banks as underwriters on Deutsche Bank's €10.2 billon capital increase, the largest ever done by the bank.

In other deals, the firm advised Hochtief on its strategic capital increase from Qatar Investment, to block a hostile takeover, while Torsten Busch and Daniela Favoccia acted for a syndicate of banks, led by Commerzbank and Deutsche Bank, as underwriters on Heidelberger Druckmaschinen's €397 million share capital increase.

The market fully supports Hengeler Mueller's ranking: "They are the most established firm and they still have the biggest percentage of the [debt] programme work and also a lot of corporate bonds and some really excellent lawyers," says one competitor. Clients praise the lawyers in the firm's debt practice for being diligent and corporate-minded: "They left no problem unsolved. They provided very deep understanding of the business, to the extent that no-one can reasonably expect from a lawyer," says one.

The firm advised pharmaceutical company Phoenix Pharmahandel on issuing a €500 million high-yield bond as part of a refinancing process. Alongside the Continental high-yield bond issued in July 2010, Phoenix's was one of the first to be issued under German law.

Another highlight for the team came in September 2010 when it advised RWE, Germany's second-biggest utility company, on its issuance of €1.75 billion in hybrid bonds, the largest ever issue of its kind by a European industrial corporation and the biggest offering of the equity-like securities in Europe since 2006.

A further deal involved advising Commerzbank and UniCredit Bank on issuing a €300 million bond to Symrise as part of the company's restructuring.

The firm has been also been active for the German Federal Ministry of Finance on setting up a €440 billion European Financial Stability Facility (EFSF) in addition to an intergovernmental financial stability programme of Eurogroup and issuance programme for the EFSF.

"Hengeler Mueller certainly belongs there, always has done and still does," says a competitor. An undisputed leader in the field, restructuring CMBS and RMBS securities has dominated the team's deal-flow in the last 12 months.

Partner Stefan Krauss has been active for client Deutsche Pfandbriefbank. First on the restructuring of a €596 million UK based CMBS for Hypo Real Estate Bank International and second on the termination a €2.2 billion synthetic CMBS transaction again for Hypo Real Estate Bank.

On the RMBS side, Krauss advised Commerzbank on the restructuring of TS Lago One's €14 billion true sale transaction and Deutsche Postbank, which is now owned by Deutsche Bank, on its €2.5 billion securities.

Partners Daniel Kress and Martin Geiger have also been active advising client GSW Immobilien on restructuring some its securitised real estate loans.

Lawyers were unequivocal in their praise for Hengeler Mueller. "They have had a very good year [and] invested in the banking and finance area," says one peer, while another rival banking partner appreciates the "very partner-focussed" approach the firm brings to deals.

"Most large clients in banking rely on lawyers who are able to find a solution," says a client, adding: "Lawyers must be well versed on the legal issues and what is standard in their market. For that you need is a lot of experience and these lawyers have that."

Refinancing has been dominating the firm's work-flow. On the borrower side, the largest of the deals was for the German pharmaceutical wholesaler Phoenix, which it advised on a €2.6 billion syndicated loan, a €500 million high-yield bond and a €500 million capital increase. Partner Ralph Defren was also active for Coutinho & Ferrostaal on an extension and refinancing of its credit facility while Thomas Cron took the lead on plastic and glass manufacturer Gerresheimer's refinancing and negotiated a new €400 million long-term syndicated loan with a five-year maturity, a €150 million loan and a €250 million revolving credit facility.

On the lender side, Cron advised the banks responsible for SAP and Symrise's revolving credit facilities.

Commentators point out that the firm "does not have cross-border capabilities", however its associations with leading firms throughout Europe were showcased on the €586 million restructuring of Carl Zeiss Vision, in which Daniel Weiss led a team advising on the restructuring and setting up a joint venture with private equity house EQT. 'Best friend firm' Slaughter and May advised on the English law aspects.

"It's very partnership orientated, it's very client-driven," says one client of Hengeler Mueller's M&A team. "It's a big firm but you don't get the feeling it's one of the big houses like Clifford or Freshfields, so it's still very customer focussed and very friendly. It doesn't give the feeling that it's a big machine," says another.

Most recently a team led by Matthias Hentzen and Thomas Meurer advised RWE on sale of majority stake in European transmission grid operator Amprion as part of an on-going restructuring and divesture project. In December 2010, the firm had advised RWE on the sale of Thyssengas, which operates the German supra-regional gas transportation network.

Hentzen and Meurer have also been working for Rolls-Royce on its joint acquisition with Daimler of specialist engine builder Tognum for €3.4 billion in May 2011.

Burkhardt Meister and joint managing partner Daniela Favoccia acted for Deutsche Bank on the acquisition of Deutsche Postbank in 2010. Meister was again active in December 2010 for Australian logistics company Brambles, advising on the voluntary takeover of the Dutch-German packaging systems supplier IFCO Systems.

On the technology side, Intel sought the firm's assistance in its acquisition of the Wireless Solutions Business of Infineon Technologies while Sanyo engaged the firm for the sale of its global semiconductor business.

Shipping is a sector that is still suffering in the wake of the crisis in Germany and the firm advised technology solution provider Thyssen Krupp on the sale of its 71% stake in Hellenic Shipyards.

Competitors question Hengeler Mueller's position in the top tier. There is a consensus that the firm does not share the capacity of its tier neighbours and that it is losing ground. "I generally see them having a decreasing market share. What I think is their problem is they don't have a dedicated private equity team," says one peer. Another agrees: "I would probably see Clifford as stronger than Hengeler, they have some individual practitioners but they don't really have a depth in private equity."

Despite criticism from its competitors the firm has been active on several notable mandates. Munich based Hans-Jörg Ziegenhain advised long-standing client Advent International on the sale of German fashion retailer Takko to Apax Partners in December 2010.

Stefan Richter was also active for the firm. He advised Hamburg-domiciled equitrust Invest on the sale of bomb disposal robot manufacturer Telerob to listed British aerospace leader, Cobham, for €78 million after buying it for €8 million in 2007.

Another notable deal saw the firm acting for Cinven, the European buyout company, on acquiring lighting product manufacturer SLV Group from HgCapital.

Hengeler Mueller has secured roles on several headline restructuring and insolvency mandates recently and its growing prominence in the market has not gone unnoticed. "They are building a group and we see them on a number of transactions and they are technically very good," remarks one competitor, adding: "Their people are good and they know the business."

The firm's restructuring and insolvency team is headed by Frankfurt partner Daniel Weiss, who took the helm on a key deal for the firm advising Carl Zeiss Vision in its €586 million restructuring.

In another highly publicised matter, the firm advised on the double restructuring of retailer Highstreet. Within eight months the firm assisted in two senior financings, which were refinanced as CMBS and mortgage bond, mezzanine financings with several tranches.

The most substantial deal the firm was mandated on was advising Hypo Real Estate's transfer of loans, securities and derivatives transactions to FMS Wertmanagement, its Bad Bank. A portfolio comprising 12,500 individual positions relating to 70 different jurisdictions worth €173 billion was relocated in what is the largest transfer of its kind in Germany.

A further deal saw the firm act for a paper manufacturer on the restructuring of €1.1 billion in a syndicated credit facility, several loans, bilateral facilities, and a hybrid bond within a debt for equity swap.