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

The optimism engendered by a flurry of IPO activity in early 2010 has fallen away in the turmoil of the European sovereign debt crisis and investors are unwilling to gamble in what are uncertain times. "We had a good first half of the year in 2010 then the second half was, from an IPO perspective, disappointing for all of us," says a lawyer. "The German economy is very strong, so the IPO market would be a strong market but it all depends on whether the market stabilises and whether Greece and the respective problems will be solved or not."

Lawyers point to a pipeline of deals but admit only the large reliable companies succeed. "The market is active in that I would say there are 10 to 12 IPOs that people are working on, but given the uncertainty around the market, deals especially private equity exits, have been postponed or put on hold. You can work on the large IPOs like Ratiopharm or Evonik, which are publically announced as multibillion for the second half of 2011, but those under €500 million are difficult."

Capital increases drove the equity markets in the first half of 2011 and filled lawyers' boots in the absence of other activity. The most significant of these were completed by Porsche for €5 billion, Commerzbank for €11 billion and Deutsche Bank for €10 billion, its largest issue ever. "The current market is very, very nervous. It's easier to place a capital increase because the company is already known to investors and maybe has a long standing, [rather] than to go public and do an IPO which investors look very diligently into," says one lawyer.

A continuing trend among issuers is the preference to take dual-track option in regards to preparing the prospectus: "Given the volatile market there is increasing interest to have it as a dual-track structure so that very late in the transaction they can decide whether it goes the M&A or IPO route," notes a lawyer.

Another development was Deutsche Börse's $9.7 billion merger with the NYSE to form the world's largest exchange operator in July 2011. The deal still faces anti-trust hurdles on both sides of the Atlantic, but if it is a success, it is anticipated that it will cut over heads by €300 million annually and significantly boost revenues.

Freshfield Bruckhaus Deringer's ranking is undisputed by commentators who consider the firm's equity capital markets practice as among the best in the country. The nature and significance of the firm's recent mandates fully support the market's thinking. Practice head Christoph Gleske is seen as the leading figure by competitors: "He's younger but he is very well accepted by the market," says a banking lawyer, adding: "He's a good guy. He's experienced and sharp."

Gleske and Andreas König spearheaded a team advising Credit Suisse, Citibank, Goldman Sachs and UBS as underwriters of Commerzbank's €626 million capital increase. The deal represented the first stage of the bank's overall €11 billion increase which was announced in April 2011 to improve the bank's capital ratio under Basel III regulations.

The firm's deal-flow increased through 2011 with the team closing three substantial deals in April. Porsche's €5 billion capital increase was the most sizable of those transactions, in which Stephan Waldhausen worked in conjunction with the Vienna office to advise the shareholders at the debt-laden car manufacturer.

In 2010 the firm won mandates from issuers on two IPOs. König represented Norma Group and its majority shareholder 3i on its €386 million IPO on the Frankfurt Stock Exchange, with Commerzbank, Deutsche Bank and Goldman Sachs as joint global coordinators and book runners. The firm also advised property management company GSW Immobilien and its majority shareholders Cerberus Whitehall on its €468 million IPO, which closed in April 2011, the largest IPO of 2011 at time of writing.

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.

A leader in the equity field, Sullivan & Cromwell has been especially active for underwriters on some high-profile transactions.

In a deal highlight for the firm, Carsten Berrar, Wolfgang Feuring and David Rockwell advised the underwriters, a syndicate of 24 banks led by Deutsche Bank, JPMorgan and Citibank, on Commerzbank's €11 billion capital increase, which enabled Commerzbank to repay most of its €18.2 billion debt to the state. The two-stage transaction started with an initial rights offering of conditional mandatory exchangeable notes (CoMEN) to the bank's existing shareholders and, via a bookbuilding process, to institutional investors. The CoMEN were exchanged into Commerzbank shares in May 2011 and the second more sizeable increase commenced.

Clients single out Berrar and Feuring for praise: "As far as capital markets law allows for innovation they are very innovative in defining the right structure to make it work but also in making it secure so the banks underwrite," says one.

Growing competition from China and subsidy cuts in the Germany has seen solar-panel producer's suffer in what was previously one of the country's biggest markets. Berrar and Krystian Czerniecki acted as counsel to the underwriters: Citigroup, Goldman Sachs, and UniCredit, of solar panel manufacturer Q Cells on its €255 million capital increase.

Berrar and Czerniecki also advised the underwriters of medical solutions company Draegerwerk & Co for its €105 million rights offering, which was issued under Rule 144A/Reg S.

All three of the top tier firms got a slice of the action on Porsche's €5 billion capital increase. Feuring took the role of US counsel to the car manufacturer on its offering which was announced in March 2011.

Clearly Gottlieb Steen & Hamilton's equity practice had a strong year and was involved in several interesting transactions. "Cleary is working on a couple of prominent IPOs. In terms of deals and market reputation there is some argument that they should be as the same level as the top three," says one competitor.

The firm was involved in two notable capital increases by large German banks. Ward Greenberg and Hanno Sperlich acted for Deutsche Bank on its €10.2 billion rights issue in October 2010. It was the client's first public equity offering in more than ten years and the largest such transaction in Europe in 2010. The proceeds were used to acquire a majority stake in the listed Deutsche Postbank and to boost its core Tier 1 capital ratio. Greenberg also advised the underwriters on the first stage of Commerzbank's €11 billion capital increase and its €626 million rights offering in January 2011.

In one of very few IPOs to launch in the latter half of 2010, Greenberg and Christof von Dryander advised long-time client the Elster Group, the utility measurement and control provider, on its $242.2 million public offer which launched in October 2010.

When the share price of Q-Cells, one of Europe's leading photovoltaic manufacturers, dropped dramatically this year as cheaper Chinese suppliers were preferred, the manufacturer engaged Thomas Kopp to advise on a package of measures including a €255 million subscription rights capital increase in October 2010.

Real estate has been a proven a lucrative sector for Linklaters in the last 12 months, with the firm developing something of a specialty. It was involved in the capital increases of German real estate companies TAG Immobilien, Hamborner Real Estate Investment Trust (REIT) and Alstria REIT in addition to the IPOs of Norma Holding and GSW Immobilien.

Partner Christoph Vaupel worked on three significant rights offerings for the firm. In a first for a German REIT, Vaupel advised the banks with regard to Hamborner's €113 million offering, he also advised the banks in relation to the rights issue of TAG Immobilien, which consisted of a simultaneous offering of shares and convertible bonds and raised €130 million to finance the take-over of Colonia Real Estate. In addition he represented tool manufacturer Gildemeister when it increased its share capital in March 2011. On the IPO side, Herbert Harrer and Mark Devlin acted for a syndicate, including Commerzbank, Deutsche Bank and Goldman Sachs, in Norma Group's €400 million public offer in April 2011, while Harrer teamed up with Florian Wirth to act for Deutsche Bank, Goldman Sachs International, Berenberg Bank, Commerzbank, HSBC, Kempen & Co and UniCredit on GSW Immobilien's €468 million IPO.

In other notable work, Harrer advised Agennix on its €78.4 million rights issue and public offering in Germany and Luxembourg in October 2010 and on the regulatory side, he was assisting the corporate team in advising the NYSE on the capital markets aspects of its planned merger with the Deutsche Börse.

The managing partner of Shearman & Sterling's capital markets practice for Europe and Asia, Stephan Hutter, is respected by peers and valued by clients. "He is very elegant and eloquent in presenting solutions and difficult messages to the client. He is one of the most experienced capital market lawyers in Germany," says one client, adding: "They have a good understanding of what we do and we are quite happy with that."

Partners Hans Diekmann and Marc Plepelits have been active advising the expanding REIT (real estate investment trust) Alstria Office, which completed two capital raisings of €50 million and €280 million in September 2010 and March 2011, respectively.

A strategic move by Hochtief saw partners Katja Kaulamo and Plepelits advising Qatar Holding as sole subscribers to the construction group's €400 million 10% capital increase. The acquisition diluted the construction group's shares sufficiently to halt the hostile takeover bid of Spanish rival ACS, at least temporarily, by increasing the value of any future proposal.

The firm also received notable instructions from underwriters. Hutter and Kaulamo advised Deutsche Bank and Raiffeisen Centrobank in connection with Austrian energy supplier EVN's capital increase in October 2010 and RBS and UniCredit in regard to Sky Deutschland's capital increase in September of last year. Both deals raised €180 million for the issuers.

Prior to its eventual sale the owners of Kable BW were considering floating the German cable operator. Hutter and Kaulamo were advising the private equity house, led by Credit Suisse, Deutsche Bank and JP Morgan, on a dual track IPO and trade sale procedure and an offering of €1.2 billion Euro-denominated high yield bonds by Kabel BW in March 2011.

After a strong year and numerous recommendations Allen & Overy moves up a tier. "They were pretty successful on a couple of deals and Oliver Seiler was active on the market," says one partner. "My first impression is that Allen & Overy is doing significantly better than they did a few years ago," adds another.

In a deal highlight, Seiler, Gernot Wagner and Knut Sauer advised the joint global coordinators and lead bookrunners Deutsche Bank, JP Morgan and Morgan Stanley on Porsche's €5 billion capital increase.

Seiler was also working on an ongoing deal advising container shipping group Hapag-Lloyd on its proposed IPO. Schaeffler's refinancing, including the purchase of further shares and the increase of its stake in Continental from 42.2% to 49.9% also kept Seiler and Wagner busy and the pair combined again to act for Verbund on its €1 billion rights issue, the largest equity transaction in Austria in 2010.

Partner Markus Pfüller led a team from Clifford Chance to advise the underwriters, led by UBS, on the successful IPO of RIB Software, which was completed in February 2011.

On a notable cross border deal with Austria, George Hacket advised the underwriters on energy supplier Verbund's €1 billion capital increase, the most sizeable equity transaction in the country in 2010. More recently, Hacket has been active for another Austrian company, the oil and gas supplier OMV, on a €750 million capital increase which closed in June 2011.

Department head Lutz Krämer and partners Benedikt Gillessen and James Black have combined on White & Case's recent equity work. The trio represented Gildemeister on a two-step €220 million capital increase, entailing a placement of shares with the company's Japanese partner and fellow power-tool manufacturer Mori Seiki, followed by a rights offering to existing shareholders.

Acting for underwriters Deutsche Bank and HSBC, the team advised on a €270 million rights offer by Aareal Bank as it sought to strengthen its capital base. The team also advised Deutsche EuroShop in its €130 million offering in October 2010.

In an ongoing deal, the firm was advising Deutsche Bank in connection with the planned merger of Deutsche Börse and NYSE Euronext. White &Case's client is acting as agent for the future listing of shares of the new holding company, Alpha Beta Netherlands, which will be formed when the two exchanges become one.

In October 2010 Jörn Wöbke joined Gleiss Lutz's equity capital market partnership by virtue of the German independent's merger with boutique firm Rittsieg.

Practice head Stephan Aubel helped the stuttering German IPO market get into gear in January 2011 by pushing through German bike manufacturer Derby Cycles' €85 million IPO. Aubel was also on hand to assist two companies in need of funds: advising shipping and real estate investment company HCI Capital on a refinancing, which involved a €32 million capital increase in August 2010 followed by an additional €11 million in spring 2011; and acting for photovoltaic manufacturer Solon on its €20 million capital increase.

Competitors see Baker & McKenzie's new hire as a concerted effort to gain a footing in the equity markets, which many feel they are in danger of being excluded from: "Christoph Wolf, the equity capital markets legal guy from Morgan Stanley, has joined them as partner so maybe they will make another push, but I haven't seen them on any deals over the last few years," says one competitor.

In notable deals, the firm advised contact card manufacturer Winter in its public-to-private process, which included a capital reduction and increase. Partner Manuel Lorenz was also active for Yorkville Advisors on a €15 million standby equity distribution agreement with ItN Nanovation.

Hogan Lovells hired Willkie Farr & Gallagher's well known equity capital markets head Michael Schlitt and his seven-strong team, including partner Susanne Schäfer, in February 2011.

Schlitt is a big catch for Hogan Lovells as commentators judge that he was Willkie Farr's equity capital markets practice: "[Willkie] are non-existent now and I don't think they will make any attempt to rebuild because there has clearly only been a practice there because of Schlitt," says one peer.

The arrival of Schlitt and his team can only have a positive impact on the firm's market share: "Given that Schlitt has joined Lovells we will see them more often."

At Hogan Lovells Schlitt and team have continued to advise the German Special Fund for Financial Stabilization (SoFFin) on reducing the Federal Republic's silent participations in Commerzbank. A placement of contingent mandatory exchangeable bonds (CoMEN) and a capital increase meant the SoFFin recouped €11 billion of the state aid it had handed out to the bank during the crisis.Clients give Schlitt their backing. One, who has worked with him for over ten years and followed him to Hogan Lovells, says: "He is consistent in thinking outside the box. He has a strong knowledge of corporate and business law. He is also good at bringing in the right people so the client has options. His knowledge is very deep and thorough. He has an affinity to the equity market and is in tune with how we do business."

The capital markets practice at German independent Luther is headed by Jörgen Tielmann who was part of the team advising Intershop Communications on establishing a joint venture with GSI Commerce which necessitated a capital increase.

The firm has also been providing continuing advice to a Chinese issuer, which includes due diligence in China and Hong Kong and a capital increase by way of a contribution in kind.

In August 2011 US firm Mayer Brown announced plans to shut down its Cologne and Berlin operations and relocate staff from both offices to Düsseldorf for the beginning of 2012. The firm is led by managing partner Jörg Wulfken.

Ulrike Binder and Stephan Gittermann head up the firm's equity capital markets practice, which has advised on two notable capital increases in the last 12 months. The team acted for the majority shareholder of Procon Multimedia in a deal which closed in November 2010 and is also advising the lead manager of a capital increase for a German company.

A hire from Beiten Burkhardt, Bernhad Gemmel, expanded Salans' capital markets partnership in January 2011.

The firm focuses on advising clients in Asia and the CIS (Commonwealth of Independent States). In May 2010 the firm closed the €7 million IPO of Euro Asia Premier Real Estate, which was the first by a Chinese developer on the Frankfurt exchange. More recently, in December 2010, the firm finalised the €11 million IPO of another Chinese business: Madison Property.