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

In 2010/11, Australia's M&A market continued to be strong compared to the European and US markets. More than 95 deals were announced and approximately A$78 billion ($84.1 billion) in funds were committed, signalling a growing confidence by investors whether domestic or international.

Australian bidders were back in business accounting for a significant portion of the bids exceeding A$1 billion in the financial year 2010, compared to 2009 where all A$1 billion transactions were initiated by foreign investors.

However, the later group has continued to underpin ongoing momentum in M&A activity and there have been a significant number of transactions completed or announced during the past 12 months involving foreign acquirers.

Another trend has been the emergence of the "loan-to-own" deal in Australia; the buy-up by investors of discounted debt in a distressed context with a view to implementing a debt-to-equity play. "Certain sectors where Australia is thriving on deals involving China could possibly be willing to head down this road", says a partner from a respected law firm.

The past year was also the year of friendly deals as 60% of announced deals were launched with the initial recommendation of the target board and 42% of deals were structured as schemes of arrangement rather than takeovers compared to 33% of deals in the previous financial year.

Cash was king, but premiums were lower. The number of deals involving purely cash consideration almost doubled from 2009 to 62%. Premiums offered however were generally lower, confirming that bidders were prepared to offer higher prices in order to secure target board support.

Allens Arthur Robinson has resolutely established its position in the M&A market with a loyal pool of leading clients such as National Australia Bank (NAB), Westpac and the Lend Lease Group. "Their offices in Sydney, Melbourne and Brisbane are particularly strong," a peer comments.

A client commends the M&A team as "trusted advisors, dependably strong, professional advice and not afraid to give us the bad news yet actively seeking workable options for us. They are there for the long haul - a true partnering between firm and client. The key relationship partners are always listening and responding, setting the standard of what I seek in an external advisor".

Led by John Greig and Chelsey Drake the firm this year advised the State of Queensland on the divestment of the X50 Abbot Point Coal Terminal, Queensland's northern-most coal terminal, the final part of the state's Renewing Queensland Plan.

The deal was valued at A$1.8 billion ($2 billion) for a 99-year lease of the X50 Abbot Point Coal Terminal to Mundra Port Pty with proceeds from the divestment will be directed towards Queensland's natural disaster recovery. The complexity involves with Mundra Port Pty is the Australian subsidiary of Mundra Port and Special Economic Zone, which developed, and now manages, the largest privately-developed port in India, and is part of Indian-based Adani Group.

Another notable highlight was the Wendy Rae-led team acting for the Canada Pension Plan Investment Board (CPPIB) one of Canada's largest institutional investors, on its proposed acquisition of Intoll Group, valued at approximately A$3.4 billion.

The Freehills M&A team has had another stellar year advising on some of the most complex, strategic and innovative deals across sectors including energy and resources, media, finance, construction and health.

Freehills advised Macquarie Communications Infrastructure Group (MCG) on it's A$5 billion ($5.5 billion) acquisition by Canada Pension Plan Investment Board.

Freehills "are a full service firm and are able to draw on the breadth of skills. Each of the partners I have dealt with has been legally extremely competent. They have been able to add the extra value a client wants from a law firm by their complete understanding of a company's strategic and commercial objectives", comments a client.

Another notable highlight was advising Prime Infrastructure (formerly Babcock & Brown Infrastructure) on it's A$2.5 billion merger with Brookfield Infrastructure. This transaction involved a company scheme of arrangement and trust schemes, and was the first to also involve a concurrent off-market takeover bid conditional on the schemes not becoming effective with an added innovative cash-out element for retail holders instead of opting to hold shares in a NYSE and TSX listed company.

Prior to this transaction, Freehills advised Prime Infrastructure recapitalisation involving an equity placement to Brookfield Infrastructure. This involved a number of institutional investors as well as a security purchase plan containing asset sales plus joint ventures involving Brookfield and its affiliates. The transaction is the largest recapitalisation to date in the Australian market.

Gilbert + Tobin significantly boosted its presence in M&A this year through the lateral hires of Tony Bancroft from Mallesons Stephen Jaques and Neil Pathak from Freehills. The market will wait to see what impact the duo can make in the future.

Blackstone's $9.4 billion acquisition of Centro Group's US operations had Gilbert + Tobin advising on the Australian aspects of the transaction which involved Blackstone entering into a binding stock purchase agreement with the Centro Group and its managed funds. This transaction represents one of the largest real estate and private equity transactions in Australia in recent times.

One client describes the firm as "very crisp and organised and professional", adding that "they have an approach which reflects client interest first". Another client says that "Gilbert + Tobin provides timely and concise advice and for these reasons I would not hesitate to recommend Gilbert + Tobin to other arrangers".

The firm advised Carlyle on the corporate aspects relating to its acquisition in Healthscope. The corporate aspects of the transaction included consortium and shareholder arrangements, equity structuring, pre-bid stakes and scheme implementation. This transaction was the first multi-billion dollar private equity transaction since the global financial crisis and is the first major Australian public-to-private acquisition by private equity since 2007.

Another deal not to be overlooked was advising of Shell Energy Holdings Australia, a subsidiary of Royal Dutch Shell (Shell). This transaction involved the partial sale of Shell's stake in Woodside Petroleum (Woodside) under an underwritten sell-down of approximately A$3.3 billion ($3.5 billion) representing the largest unwritten block trade completed in Australia's history.

In March 2012 Mallesons Stephen Jaques merged with King & Wood to form King & Wood Mallesons, the first Sino-Australian firm. In the first phase the two firms will combine their Australian, Chinese and Hong Kong partnerships under a Swiss Verein structure. Full financial integration plans are yet to be announced.

"I recommend them and characterise them as absolutely top-notch, certainly rank them in the top one or two firms in Australia. They provide really good people who understand the market, the cutting edge of new ideas and new business in the banking and finance world. Mallesons is really pre-eminent," comments a client.

The team is led by David Friedlander, Greg Golding and Stephen Minns, and clients are not short of praise. "Just really good," says one, "everyone is on top of their game and they all do slightly different things and excel at it". "They have a good understanding of how we operate and have worked with us for many years. Just very professional and strategic," says another

The firm advised Axa Asia Pacific Holdings on the proposed acquisition by AMP. It served as the lead legal advisor and co-ordinated other jurisdictions including China, Indonesia, Philippines, Malaysia, India, Singapore and New Zealand in this A$14 billion ($15.1 billion) deal.

This complex structured transaction involving a listed public company intended to maximise the value for Axa APH shareholders in selling major assets to a different acquirer and thereby maximise the overall consideration. It also involved the separation of a substantial multi-jurisdictional financial services business and approvals from its shareholders.

December 2010 saw the M&A team act as principal legal adviser to Canada Pension Plan Investment Board's A$3.4 billion acquisition of Intoll Group, a triple-stapled entity listed on the Australian Stock Exchange (ASX) and holding toll road investments in Australia and Canada. Mallesons advised on the Australian law for this proposal by Canada Pension Plan Investment Board to acquire all the stapled securities in Intoll by schemes of arrangement.

Baker & McKenzie's M&A team continues to be involved in significant and high-profile transactions with leading domestic and international clients. A satisfied client states: "I recommend Baker & McKenzie, they performed in a timely manner and always delivered a sensible and manageable solution."

Steven Glanz, "a highly regarded partner" according to one rival lawyer, was busy advising shareholders of Cascade Coal on the A$500 million ($539 million) sale to White Energy Company.

The firm was appointed as lead legal adviser to the New South Wales (NSW) Government on its electricity reform project and has acted on the transactions for the last three years. The project underwent a number of restructures due to changes in government policy and the inability to pass legislation through the parliament of NSW

Origin Energy purchased the retail arms of Integral Energy and Country Energy from the NSW government for A$2.3 billion. Origin paid a further A$950 million for the output of Eraring Energy, which operates power stations on Lake Macquarie and in Shoalhaven.

In addition, Hong Kong-owned TRUenergy spent A$2.04 billion for Energy Australia's retail business, the electricity trading rights for Mount Piper and Wallerawang coal-fired power stations and three power station development sites.

The unique features of this project included the need to implement a wholesale privatisation program without legislative support for the first time. This required asset sale transactions and transfers without statutory instruments of a significant quantity of contracts comprising the retail and generation businesses.

In March 2012 Blake Dawson merged with Ashurst with the combined operation adopting the UK firm's name. Initially the merger will be focused on the two firm's Asia operations with full integration expected in 2014.

The firm has a particular strength in cross-border M&A work and is led by Marie McDonald, who is well respected in the market: "She's still without a doubt one of the best M&A lawyers in Australia," says one and another agrees: "Just her presence in the room makes the whole transaction simplified tenfold."

Clients also praise the firm: "The lawyers are able to assign experienced practitioners to the exact field or transaction. Their ability to put together transactions and work through tight deadlines is quite remarkable." Not resting on its laurels, Blake Dawson continued to strengthen and grow its corporate team in Australia and the Asia-Pacific region with lateral partner hires in Jason Lambeth and Phil Breden, both from Gilbert & Tobin and Michael Sheng from Freshfield's Shanghai office.

In September 2010 the firm advised Lihir Gold on its acquisition by Newcrest Mining for $9.5 billion by way of scheme of arrangement, under Papua New Guinea law. This transaction created the world's fourth largest gold company and Australia's tenth largest company with a market capitalisation of A$26 billion ($27.8 billion). This acquisition was Australia's largest-ever resources takeover and the largest cross-border merger by scheme of arrangement in the country's history.

Another notable highlight for the team last year was advising Posco on multiple takeover offers valued at A$4.1 billion by US coal giant Peabody Energy and New Hope to acquire all of the shares available and privatise Australian-listed mining company Macarthur Coal.

The firm also took part in what would have been the second largest M&A deal announced worldwide for 2010, acting as the legal advisor on the Australian law aspects of BHP Billiton's attempted $43.2 billion takeover of Potash Corporation of Saskatchewan.

Clayton Utz's M&A department is home to two big personalities which clients have a lot of time for: "Rod Halstead, being the senior partner, impressed me with his dedication, mastery of all the key issues in the transaction and attention to detail," says one. "He has extensive experience and has a good grasp of the Australian market practice," adds the client.

Equally, Karen Evans-Cullen is described by a client as "similarly dedicated and technically very good, very capable and efficient operator, fits our work style, which has a tendency to demand instant answers".

Clayton Utz advised AMP in relation to its A$14 billion ($15.1 billion) merger with Axa Asia Pacific Holdings which saw AMP merge the Australian and New Zealand businesses of Axa with its own operations. The final proposal, coming after a pursuit of 15 months, received Australian Competition and Consumer Commission (ACCC) approval following earlier bids by AMP and by National Australia Bank (NAB). In the case of the NAB bid, the Clayton Utz Competition Group, led by Michael Corrigan, was successful in having the transaction blocked by the ACCC, paving the way for AMP to launch a revised bid.

Other highlights included advising long-standing client Origin Energy in relation to its successful A$3.25 billion bid for NSW energy retail assets, Country Energy and Integral Energy rights to the Eraring power station. This transaction has catapulted Origin Energy into the position of being the largest energy retailer in Australia, with 4.6 million customer accounts and one of Australia's largest and most diverse generation portfolios.

Clayton Utz also acted as Australian legal adviser to Singapore Exchange (SGX) on its proposed merger with Australian Stock Exchange (ASX) via scheme of arrangement. ASX and SGX were to remain separate legal and locally regulated entities. This transaction represents the first proposed merger of Exchanges in the Asia-Pacific region in a period of significant structural change in global financial markets.

"Their advice and service is first class in both public and private M&A, with partners and resources of the highest order," comments a long time client. Competitors highlight the firm's ability to "speedily assemble an M&A transaction team with the depth of resources required to implement transactions efficiently".

The Minter Ellison partners are very highly regarded as one client notes that: "Bart Oude-Vrielink and John Steven have a good combination of commercial understanding and technical expertise in the area of listed company advice work." Another client highlights Costas Condoleon as "very solid in providing good commercial legal advice, his team is strategically sound and can bring in the resources required which you need for expensive due diligence."

December 2010 saw Minter Ellison serving as the legal advisor to Rio Tinto's on its A$4 billion ($4.3 billion) all cash takeover bid for Riversdale Mining. This transaction included merger terms, pre-bid agreements, strategy, due diligence and bid implementation.

Other highlights include acting for Healthscope in relation to the acquisition proposal it received from a private equity consortium comprising TPG Capital and The Carlyle Group. The recommended A$2.7 billion cash offer was the culmination of an intense bidding war between a number of private equity groups. This deal, by scheme of arrangement, was subject to shareholder and Foreign Investment Review Board approval and is Australia's largest private equity buy-out.

Although the firm can accommodate any transaction size, Atanaskovic Hartnell typically fields small focused teams that are "well-regarded, well considered, well put together on matters", according to one client.

John Atanaskovic, a former ASIC chairman is popular among clients."[He is] the one I principally go to. I think he has a well-known reputation within the legal industry as being a tough and aggressive negotiator but also someone who's very skilled in the M&A arena," says one.

Highlights in the past year include acting for the Ontario Teachers' Pension Plan (OTPP) in connection with the exit of its investment in Macquarie Infrastructure Group (MIG) through an A$341m ($367 million) underwritten block trade sale.

In May 2011, UK magic circle firm Clifford Chance merged with Australia's two leading boutique law firms, Chang Pistilli & Simmons (CP&S) in Sydney and Cochrane Lishman Carson Luscombe (CLCL) in Perth.

The mergers are among the first steps in the delivery of an ambitious growth strategy for Asia Pacific, with plans to double regional revenues for the firm through investment in new offices, talent and practices.

The new Australian operation is known as Clifford Chance, and CP&S and CLCL's partners and lawyers have been fully integrated within the international firm, creating an immediate 14-partner capacity for Clifford Chance in Sydney and Perth.

The firm acted for Ricegrowers (SunRice), which is currently the subject of an unsolicited bid for A$650 million ($700 million) by the Spanish food giant, EBRO Foods. This complicated transaction involved significant legislative and political review of the State and Federal Government single desk policies and foreign investment ownership rules.

A client picks out Damien Reichel of Johnson Winter & Slattery "as a person who has a very strong background in M&A. Completed transactions against them and with them for over 20 years and so I know that he's a very good practitioner and maybe near the top of Australia in this practice."

The firm advised global biopharmaceutical company and relationship client Cephalon on its strategic alliance with Mesoblast. Cephalon being granted exclusive world-wide rights to commercialise specific products based on Mesoblast's proprietary adult stem cell technology platform in exchange for an upfront payment of $130 million and agreement to regulatory milestone payments of up to $1.7 billion.

A client of Henry Davis York picks out partner Glen Hughes for praise: "Very commercial, has great ability to empathise with the businesses that are our targets. We operate at the smaller end of the private equity market where dealing with a vendor who wasn't overly sophisticated or savvy, he had the ability to tailor his approach so he could speak at the same level."

Notable highlights include advising ING Real Estate Investment Management on the phased withdrawal from its Australian real estate investment management activities. This included its management of five ASX (Australian Stock Exchange) listed real estate investment trusts with excess of A$7.2 billion ($7.76 billion) in assets under management.

The Norton Rose team is praised by a client for having a, "proactive and practical approach to M&A" and "exceptional ability on solving potential problems". Last year saw the firm advising Banpu Public Company Limited (Banpu), one of Asia's leading coal and energy providers, on all aspects of its A$2.5 billion takeover of Centennial Coal Company, Australia's largest independent coal producer.

The team also advised Linc Energy's, a coal-energy company on the sale to Adani Mining Pty, a wholly owned subsidiary of India's Adani Group.

The Allen & Overy M&A team, "is highly experienced and extremely commercial" and "very enjoyable to work with", says a client of the firm.

The past year saw the M&A team advising SABMiller, the world's second largest brewer, on its A$11.2 billion ($10.7 billion) proposed acquisition of Foster's Group, the Australian based brewer.

Other highlights include advising Equinox Minerals on a number of high profile transactions including, the offer by Barrick Gold Corporation to purchase all of the shares in Equinox for A$7.1 billion and $6.5 billion bid for Equinox by Minmetals Resources.