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

"Early in the year the M&A market was shaping up for an active year," says a partner from a leading law firm. This was the verdict before the tragic events in Christchurch, which have created a number of economic challenges for New Zealand.

However, optimism still abounds and in the past year the country has seen roughly NZ$5 billion ($4 billion) worth of M&A deals. Historically, it is Australia that has provided most of New Zealand's foreign direct investment, but in the last year over NZ$1 billion of this came from a wider spread of Asian investors.

Partners are hopeful that with soft commodity dynamics in Asia remaining strong an increase in activity, particularly in the food, beverage and agricultural sectors, will be seen throughout the rest of 2011.

Recent stand out M&A deals include the NZ$605 million acquisition of Tegel by Affinity Equity Partners and the acquisition of a majority interest in Scales by Direct Capital. Ongoing interest by private equity firms is expected as they appear to have the funds available and are poised to respond to a need to invest based on capital life cycles.

There are also plenty of assets still up for sale following the dramatic collapse of South Canterbury Finance, among them the company's stake in Dairy Holdings, the country's largest dairy farm company.

Bell Gully retains its top tier status with another transaction-filled year. The firm maintains a strong bench of talent, which is recognised by the market. "Garry Downs and James Gibson are well regarded," says one peer. The firm's depth and expertise extends to Anna Buchly, "a rising star who has been an integral part of the team [advising us] on both our joint ventures", says a recent client.

Last year, Downs, Gibson and Buchly were led a team to advise Crown Fibre on all legal aspects of the New Zealand Government's ultra-fast broadband initiative, aimed at getting UFB to 75% of New Zealand households by 2019. Crown Fibre is the government's investment vehicle for the UFB initiative with NZ$1.5 billion ($1.2 billion) in funds. This is one of the largest infrastructure projects in New Zealand's recent history and is extremely high profile in both the public and private sectors.

"The firm has the ability to reach internationally if necessary", says one client, and this was demonstrated when the team advised New Zealand building materials manufacturing and distribution company Fletcher Building on its successful NZ$1 billion-plus takeover offer for the Australian company Crane Group. The company wanted to diversify its presence in Australia to include the plastic pipe and plumbing trade distribution markets.

It is relatively rare for New Zealand companies to buy companies in the larger Australian market and the transaction represented the largest on-market takeover of an Australian public company to date. It was also the first successful script-based takeover offer a New Zealand company has made for an Australian company.

Chapman Tripp's large mergers and acquisition team continues to lead the way in New Zealand. "I think they are the best breed in New Zealand," says a client. "I like the way they provide thoughtful bespoke solutions, not a one answer fits all." The client continues: "it is a distinctive feature of Chapman Tripp that they present complex ideas in simple ways."

Highly regarded John Strowger "handles some of the largest deals", according to a peer who praised the team's "depth of expertise and experience [which] is unparalleled in the New Zealand market".

Last year's deal highlights include advising parties on the merger of MARAC Finance, Canterbury Building Society and Southern Cross Building Society to form a NZ$2.2 billion ($1.6 billion) listed financial services group intended to become New Zealand's only listed registered bank. The deal was extremely complex and involved three businesses with over NZ$2 billion of assets, an IPO of NZ$300 million in shares and the transfer of NZ$1.7 billion of debt securities.

Another notable highlight saw the team advise AMP on its acquisition of Axa Asia Pacific Holdings. This was part of a two-step transaction involving a scheme of arrangement to allow the merger to go ahead, followed by a sale to Axa by AMP of Axa APH's Asian assets.

"Russell McVeagh and the partners I deal with are amongst the very best I have worked with," says one client. "Top notch people with a very commercial approach and ability to deliver practical application," adds the client.

The team suffered the departures of high profile partners Garth Sinclair and Matthew Mallet in late 2010. Having been at the firm for over 20 years Sinclair will be a big loss; he moves to boutique firm Webb Henderson. Mallet made the move to Morrison Daly in September 2010.

The firm continues to act on a number of high profile mandates and peers highlighted partners Pip Greenwood, "one of the best in New Zealand" and David Hoare as "a top notch corporate practitioner". One such mandate saw the team act on the sale of Tegel, New Zealand's market-leading poultry producer, in a transaction that involved negotiations with a number of different vendors and stakeholders in multiple jurisdictions. The transaction is one of the largest private equity transactions ever in the New Zealand market and also one of the largest LBOs in the Trans-Tasmanian market (spanning both Australia and New Zealand) in 2010, valued at between NZ$550 million ($447 million) and NZ$1 billion.

The firm's ability to complete complex and difficult transactions is welcomed by clients: "They are in the top end of town. I feel that they are highly talented," says one.

Another highlight for the firm last year was acting for Meridian, New Zealand's largest electricity generator, on the restructuring of the government's commercial interests in the electricity industry. Meridian was the central participant in all aspects of the restructure. The transaction involved special legislation to authorise the transfer of Meridian's power stations, canals, dams and storage lakes, which Meridian intended to sell.

"Simpson Grierson are fully conversant with the detailed technical requirements of New Zealand M&A laws" and "they have a commercial approach which is focused on achieving the right outcome in the most efficient way", says a client.

"The M&A team provide top quality service and with a fairly large team they are able to take demanding workloads, which is a credit to the firm," comments another client.

The team acted as lead legal provider to the Auckland Transition Agency and relevant local authorities, who were tasked with planning and managing the amalgamation of Auckland's seven city and district councils and the regional council to establish a new unitary authority: Auckland Council.

This amalgamation is New Zealand's largest ever merger and follows from a Royal Commission investigation into the governance arrangements appropriate for New Zealand's largest city. This is easily the largest in New Zealand history, considering the organisation's NZ$29.5 billion ($24 billion) asset base and annual capital expenditure of approximately NZ$3 billion.

Another highlight was acting for EastPack in connection with the merger with the Satara Co-operative Group. The merger created New Zealand's largest kiwi fruit packer. The transaction was complex as each company was a co-operative with two classes of shares: transactor shares, with a nominal value and which entitle growers holders to a rebate but not a dividend, and normal investor shares, which pay a dividend.

"Buddle Findlay is our preferred legal partner. They take a proactive approach to the legal process and in almost all cases drive the legal process for a transaction", says a client. A highly regarded practitioner comments "I like Buddle Findlay because of their technical expertise", while a client adds: "They are definitely within the top three in Auckland, others being Chapman Tripp and Bell Gully."

The team advised Olam International, a global supply chain manager and processor of agricultural products and food ingredients, on its successful takeover of NZ Farming Systems Uruguay (NZFSU), acquiring 77.9% of the New Zealand Stock Exchange (NZX) listed dairy farming company.

The takeover offer brings Olam's total investment in NZFSU to NZ$120.3 million ($98 million). The initial cash offer price was increased by Olam following Union Agriculture's announcement that it intended to make a competing bid at a price higher than Olam's original offer price. The Olam takeover of NZFSU represents the only successful public takeover on the NZX in recent years.

Another notable highlight was advising Japanese food group Imanaka on the purchase of food ingredients manufacturer Cedenco Foods, which is in receivership and liquidation. The transaction involved dealing with very short timeframes in a competitive process on top of the usual complications involved in acquiring receivership assets.

To round off a busy year, the team also acted on a number of other deals including advising the vendors on the sale of Cream Media to Greenstone Pictures, advising Aon NZ on the acquisition of the brokering business of Herbert Insurance Group and advising the vendors on the sale of the management contract to run Vector Arena.

"Harmos Horton Lusk (HHL) is 'giving the big firms some serious competition on large commercial transactions," says a client. This idea that the firm is punching above its weight and competing with larger firms was galvanised when the firm brought in Paul Oldfield from Russell McVeagh this year to enhance its M&A team.

"Boutique law firm they may be but their quality of work is by no means less than the traditional New Zealand powerhouses," comments a client.

The team advised Southern Cross Building Society in respect to its participation in a three-way merger with Marac (a subsidiary of New Zealand Stock Exchange (NZSX) listed PGC) and CBS to create Building Society Holdings. The merged vehicle, which had establishment assets of NZ$2.2 billion ($1.8 billion), is hoped to become New Zealand's only locally domiciled and NZSX primary listed registered bank.

Another highlight for the team was acting for the Fidelity Family Trust, as majority shareholder in Fidelity Life, in respect of the successful defence of an unsolicited NZ$118 million proposed takeover offer by Tower.

A rival partner observes that HHL have four partners handling all the M&A work: Greg Horton "negotiates the optimal outcome", Andrew Harmos is considered a "legal statesman" and John Lusk and new recruit Paul Oldfield are the "behind the scenes opinion and knowledge providers".

To cap off a strong year, the team advised Maui Capital, manager of Maui Capital Indigo Fund, on the establishment of PagePack LP and on PagePack's acquisitions of New Zealand based BJ Ball Group and Australia based Focus Paper Group.

"Minters have high calibre people that usually deliver a client-focused service", comments a client of the firm. The past year has seen the addition of several new partners through internal promotion or lateral hiring in the forms of Silvana Schenone, Sarah Sinclair and Neil Millar from Kensington Swan.

The team advised Agria (Singapore) and New Hope last year in the partial takeover for 51% of PGG Wrightson, one of New Zealand's largest agricultural services companies. The NZ$141 million ($115 million) transaction was complicated by the need to obtain regulatory approval in both New Zealand and China.

A client comments: "The partners and staff at Minter Ellison are bright and easy to deal with. They are generally on par with or exceed other law firms in their overall delivery." The same client adds: "I feel valued as a client and would characterise the relationship as one of mutual trust and respect."

The team also advised Canadian Helicopters Limited in its NZ$160 million acquisition of the assets and business of Helicopters (NZ) including its subsidiaries in Australia, Laos and Cambodia. The transaction formed part of the receivership of South Canterbury Finance.

"Kensington Swan is the best legal firm I have worked with in my business career," says a client and "I rate the firm's technical ability highly, they have good knowledge, expertise and are definitely innovative."

The firm advised the New Zealand Stock Exchange (NZX) Listed Oyster Bay Marlborough Vineyards on its takeover by the Delegat's Wine Estate. This was one of the few successful takeovers in 2010.

Another notable highlight saw the team acting for the Wallace family trusts during a competitive sale process and subsequent sale of their shares in Electropar to the Preformed Line Products Company.

"Mayne Wetherell is starting to win significant projects off the back of the excellent reputation it has built in recent years for its commercial acumen," says a rival partner.

The past year saw the team advising Deutsche Bank on the 49.9% investment by Deutsche New Zealand and its strategic alliance with Craigs Investment Partners. This transaction was particularly complicated and involved not only the creation of extensive shareholding arrangements but the implementation of the sophisticated financial services provided by both parties at a time of increasing financial services regulation in New Zealand.

Another highlight was Acted for Rings Scenic Tours Limited on its joint venture arrangements with Sir Peter Jackson's Wingnut Films Productions Limited in relation to the development of a major tourism operation at the Hobbit movie set in Matamata.

Last year DLA Phillips Fox advised Kuehne + Nagel in its acquisition of a 75% interest in Cooltainer Holdings, a New Zealand based freight operator specialising in refrigerated shipping containers with operating subsidiaries in both New Zealand and Australia.

The group's parent company is listed on the Swiss Exchange. Management retained a 25% stake and the team had to draft and negotiate the ongoing shareholders' agreement which included complex arrangements covering the ultimate exit of the management shareholders.

The transaction was further complicated by the intervention of the Christchurch earthquake shortly prior to the intended date for exchange, as Cooltainer's head office is based in the city.