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Deal Watch: Amid Oil Price Plunge, Two Big Energy Deals

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A dip in global commodities prices over the past few years has wreaked havoc on the oil and natural gas industry, as U.S. bankruptcy courts in Texas and elsewhere have become increasingly crowded with energy companies seeking Chapter 11 protection.

But some big-firm lawyers are hoping that economic stresses will bring about transactional opportunities for consolidation, as noted this week by sibling publication Texas Lawyer. At a Baker & McKenzie-sponsored oil and gas seminar this month, participants spoke of increased interest by private equity firms in raising bids for energy assets as global oil prices begin to stabilize after years of free fall.

Amid that backdrop, French oil field services firm Technip SA and Houston-based FMC Technologies Inc. agreed Thursday to combine in a $13 billion all-stock deal. Both companies have reached a memorandum of understanding ahead of a definitive merger creating TechnipFMC.

Davis Polk & Wardwell and leading French firm Darrois Villey Maillot Brochier are advising Paris-based Technip on the transaction. Davis Polk corporate partner William Aaronson in New York is leading a deal team from that firm, according to Texas Lawyer. John Freeman serves as Technip’s general counsel.

Aaronson also advised Technip on its $937 million acquisition of Global Industries Ltd. in 2011, as well as the company’s purchase of Stone & Webster’s process technologies and associated oil and gas engineering capabilities the following year. Davis Polk corporate partner Joseph Rinaldi in New York has served as an independent member of the board of directors at Technip since 2009.

FMC, which back in 2009 turned to social media networks in order to find outside legal firms, a process that yielded little success, has tapped Latham & Watkins to handle its proposed merger with Technip. Mark Gerstein, global chair of Latham’s M&A practice, and Bradley Faris, co-chair of the firm’s Chicago corporate department and vice chair of Latham’s M&A practice, are taking the lead on the matter.

Dianne Ralston took over as general counsel of FMC last year, replacing retiring longtime legal chief Jeffrey Carr, who joined the Valorem Law Group. The proposed tie-up between FMC and Technip is expected to close by early 2017.

In other M&A news …

Pfizer Inc./Anacor Pharmaceuticals Inc.

After its scuttled $160 billion union with Allergan plc, Pfizer’s on the prowl again. The New York-based pharmaceuticals behemoth announced Monday that it has agreed to pick up Palo Alto, California-based Anacor for $5.2 billion, including debt. Anacor’s main asset, crisaborole—a treatment for eczema—is currently under review by the U.S. Food and Drug Administration. Pfizer’s Anacor acquisition is expected to close in the third quarter of this year.

Legal Advisers: Wachtell, Lipton, Rosen & Katz for Pfizer; Davis Polk for Anacor.

Midea Group Co. Ltd./Kuka A.G.

Chinese appliance manufacturer Midea has made a $4.5 billion bid for German robotics maker Kuka, of which the Shenzhen-based acquirer already owns a 13.5 percent stake. The proposed takeover ranks in among the largest unsolicited approaches of a foreign company by a Chinese buyer, as noted by sibling publication The Asian Lawyer. Midea announced its proposal Wednesday.

Legal Advisers: Freshfields Bruckhaus Deringer for Midea; Linklaters for Morgan Stanley as financial adviser to Midea; Clifford Chance for Kuka.

Range Resources Corp./Memorial Resource Development Corp.

In another energy industry M&A deal announced this week, Fort Worth, Texas-based Range Resources has agreed to acquire fellow oil and natural gas producer MRD in an all-stock deal valued at $4.4 billion, including debt, according to Texas Lawyer. Natural Gas Partners LP serves as a principal stockholder in Houston-based MRD. Announced Monday, the deal is expected to close in the second half of this year.


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