May 31, 2009

Cleary Gottlieb advised Morgan Stanley in a joint venture – Morgan Stanley Smith Barney – with Citigroup Inc. that combined both parties’ retail brokerage operations and created the largest retail brokerage in the world, in terms of the number of financial advisors. Morgan Stanley Smith Barney will be owned 51% by Morgan Stanley and 49% by Citigroup. Definitive agreements were signed on January 13 of this year and the transaction, which had initially been expected to close in the third quarter, closed on May 31.

Cleary Gottlieb was engaged by Morgan Stanley after the execution of the definitive agreements in January to negotiate a number of interconnectivity agreements among Morgan Stanley, Citigroup and Morgan Stanley Smith Barney related to the distribution of securities, the transmission of client order flow, the provision of research, the sweeping of customer funds, the provision of transition services and certain related issues.

May 13, 2009

BNP Paribas Group has successfully completed its acquisition of Fortis Bank, making BNP Paribas the largest bank in the Eurozone by deposits. The final aspects of this extremely complex transaction, which involved government bodies and financial supervisory authorities across several jurisdictions, negotiations with the European Commission, and fierce litigation by opponents of the transaction, closed on May 13 after eight months.

In the transaction, Cleary Gottlieb represented BNP Paribas in its acquisitions of approximately 75% of Fortis Bank and a majority stake in Banque Générale du Luxembourg, and on the acquisition of 25% of Fortis Insurance Belgium by Fortis Bank, as well as the simultaneous defeasance of a portfolio of structured products from Fortis Bank worth about €11.5 billion.

The firm fielded a large team spanning multiple offices, including Paris, Brussels, London, New York and Washington, and practice groups, including corporate, finance, regulatory, competition and tax.

Apr 30, 2009

Cleary Gottlieb is representing the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America ("UAW") in its negotiations with Chrysler, Fiat and the U.S. Treasury relating to the Chapter 11 filing by Chrysler. The firm's work has included advising the UAW with respect to the proposed ownership of 55 percent of a new Chrysler by a union retiree healthcare trust, a structure Cleary Gottlieb helped put in place in 2005.

Cleary Gottlieb has a long relationship with the UAW dating back to the 1990s and the restructuring of Navistar Corporation. In recent years, the firm represented the union in connection with the novel agreements entered into in 2005, 2007 and 2008 with General Motors Corporation, Ford Motor Co. and Chrysler to establish the Voluntary Employees’ Beneficiary Association trusts to provide retiree health care benefits for hundreds of thousands of Americans.

Feb 27, 2009

Cleary Gottlieb is representing Citigroup in its exchange offer of common stock for up to $27.5 billion of its existing preferred securities and trust preferred securities at a conversion price of $3.25 a share. The U.S. Department of the Treasury has agreed to convert up to $25 billion of its preferred stock investment in Citigroup into common stock. This transaction will substantially increase Citigroup's tangible common equity without any additional investment from the U.S. government. The firm is also acting as lead disclosure counsel to Citigroup.

Cleary Gottlieb previously advised Citigroup in its $25 billion private sale to the Treasury of preferred stock and a warrant to purchase common stock.

Citigroup Inc., a global financial services company with approximately 200 million customer accounts in over 140 countries, provides financial products and services, including banking, securities brokerage and wealth management.

Apr 09, 2009

Cleary Gottlieb represented HSBC Holdings plc in its £12.5 billion ($17.7 billion) five-for-12 rights offering of over 5 billion new ordinary shares at a subscription price of 254 pence per share. The offering was the largest of its kind in the United Kingdom. The deal consisted of a registered public offering in the United Kingdom, the United States (in the form of American depositary share rights), Hong Kong and other jurisdictions. Goldman Sachs International acted as sole sponsor, and together with JPMorgan Cazenove Limited and HSBC Bank plc, joint bookrunner and joint global coordinator. The rights offering was announced on March 2 and was approved at a general meeting of shareholders on March 19. The rights offering subscription period ran from March 20 until April 3. During that period, existing HSBC shareholders subscribed for 96.6 percent of the new ordinary shares offered to qualifying shareholders. The joint global coordinators placed the remaining 3.4 percent of the new ordinary shares on April 6, and the rights offering closed on April 9. Cleary Gottlieb acted as U.S. counsel for the issuer.

HSBC is one of the largest banking and financial services organizations in the world. HSBC's international network comprises around 9,500 offices in 86 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. HSBC’s shares are listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges and held by around 200,000 shareholders in some 100 countries and territories. On the New York Stock Exchange, the shares are traded in the form of American depositary shares.

Jun 19, 2009

Cleary Gottlieb is representing Nortel Networks on the proposed $650 million sale of its wireless infrastructure business to Nokia Siemens. The firm is also U.S. bankruptcy counsel to Nortel and affiliates in their U.S. Chapter 11 proceedings.

Nortel announced June 19 that it had entered into a “stalking horse” sale agreement with Nokia Siemens for the sale of substantially all of Nortel’s CDMA business and LTE Access. The transaction requires U.S. and Canadian court approvals, and is subject to the satisfaction of customary and other conditions, including governmental approvals such as in Canada and the United States. The firm is advising Nortel on numerous aspects of the transaction, including corporate, bankruptcy, securities, employee benefits, intellectual property and real estate.

Nortel has been a client of Cleary Gottlieb for more than 20 years. In recent years, the firm has represented Nortel in a number of financing transactions and in its sale of assets related to Nortel’s UMTS access business to Alcatel-Lucent. The firm also advised Nortel on European aspects of its sale to Flextronics of manufacturing operations and related activities in Canada, Brazil, France and Northern Ireland.

A recognized leader in delivering communications capabilities across the world, Nortel does business in more than 150 countries.

Dec 11, 2008

Cleary Gottlieb acted as counsel to BNP Paribas and Crédit Agricole in connection with the issuance of €2.55 billion and €3.0 billion, respectively, of deeply subordinated perpetual securities to a French state-owned entity as part of the French bank recapitalization program. The deals priced on December 10 and closed on December 11.

The securities were issued to the Société de Prise de Participation de l’Etat (SPPE), a company established by the French State as part of the government’s plan to provide capital and liquidity to French banks. SPPE is one of two companies established under this program. Its role is to invest in equity and hybrid equity instruments, while the other company provides short and medium-term debt financing to French banks.

BNP Paribas and Crédit Agricole were among six French banks that issued a total of €10.5 billion of hybrid securities to SPPE in its first investment round. The issuances followed the approval by the European Commission of the SPPE program, under European State Aid rules that limit the ability of EU Member States to provide subsidies to companies.

The securities are deeply subordinated, perpetual notes that qualify as “Tier 1” capital for bank regulatory purposes. Their terms are similar to other such securities that have been issued by the banks in the past. However, the banks also undertook in a separate agreement to pay a premium upon repurchase or redemption of the securities, with the amount of the premium increasing annually. This was part of the deal reached with the European Commission, which sought terms that will encourage the banks to repay the notes as soon as possible.

Cleary Gottlieb also represented Natixis in connection with its issuance of €1.9 billion of similar deeply subordinated notes to its principal shareholders, Banque Fédérale des Banques Populaires and Caisse Nationale des Caisses d’Epargne. Each of the shareholders issued its own deeply subordinated notes to SPPE under the French recapitalization program, and in turn used most of the proceeds to subscribe to back-to-back issues by Natixis.

Jan 21, 2009

Cleary Gottlieb represented Grupo Bimbo, S.A.B. de C.V. (Grupo Bimbo) in its acquisition of Weston Foods, Inc., the U.S. bakery division of George Weston Limited, for U.S.$2.38 billion and its acquisition of related financial assets for U.S.$125 million. The transaction closed on January 21, 2009.

Seven banks financed the transaction through a U.S.$1.9 billion dual currency term facility with a three-year tranche, a five-year tranche and a U.S.$900 million dual currency one-year bridge facility that is expected to be taken out in the local bond market. A substantial portion of the commitments were funded in Mexican Pesos, requiring Grupo Bimbo to engage in foreign exchange transactions in between funding and payment to George Weston Limited on the day of closing. This is the largest cross-border acquisition financing in recent months in Latin America.

Grupo Bimbo, which is among the world’s largest baking companies in terms of production and sales volume, has more than 80 plants and 800 distribution centers located in 18 countries throughout the Americas, Europe and Asia. Grupo Bimbo produces over 5,000 products and its direct distribution networks comprise more than 36,500 routes and 96,000 employees.

As a result of this transaction Bimbo Bakeries USA (BBU), Grupo Bimbo’s consolidated U.S. operation, becomes one of the largest baked-goods companies in the country, with a leading position in bread, buns, sweet baked goods and cakes. BBU’s brand portfolio now includes Arnold, Bimbo, Boboli, Brownberry, Entenmann’s, Francisco, Freihoffer’s, Marinella, Mrs Baird’s, Oroweat, Stroehmann, Thomas’ and Tia Rosa.

Apr 19, 2009

Cleary Gottlieb represented the Republic of Liberia in its negotiations with private creditors to eliminate approximately $1.2 billion in outstanding private sector debt, at a discount of nearly 97 percent of its face value, the steepest discount ever negotiated on developing country commercial debt. The deal closed on April 14 after over two years of negotiations, with a payment of $38 million to extinguish 25 outstanding commercial facilities representing 97.5% of Liberia’s foreign commercial debt, one of the highest rates of participation in a sovereign debt buyback in the last several decades. The World Bank contributed half the money for the buyback through the International Development Association Debt Reduction Facility, and the United States, Germany, Norway and the United Kingdom contributed the other half. The buyback was completed at no cost to the citizens of Liberia thanks to the financial support of the World Bank and other partners, including a Swiss foundation.

Nov 21, 2008

Cleary Gottlieb is representing the German Savings Bank Association (“DSGV”) with respect to back guarantees granted by DSGV and other major German banking associations and financial institutions to the Federal Republic of Germany in connection with a €50 billion rescue package arranged by the German Federal Government and various significant financial institutions for the Hypo Real Estate Group.

In 2007, Cleary Gottlieb advised DSGV on the acquisition of Landesbank Berlin Holding AG (formerly “Bankgesellschaft Berlin”).

Oct 01, 2008

Cleary Gottlieb is representing Dexia on all aspects of its recapitalization plan. After three days of intense negotiations between Dexia, its shareholders and the Belgian, French and Luxembourg governments, and on the back of heightened crisis in the European banking sector, a €6.4 billion recapitalization plan was put together in record time. Under the plan, the Belgian state and regions as well as the existing core Belgian shareholders of Dexia, on the one hand, and the French government and the CDC on the other, will each inject €3 billion into Dexia SA. In parallel, the Luxembourg government will be subscribing for €376 million in convertible bonds issued by Dexia BIL.

Dexia's recapitalization is the second instance of urgent, large scale support by European governments to Belgian financial institutions in the last few days, after the rescue, over the course of last weekend, of Fortis. A Cleary Gottlieb team is representing BNP Paribas in its announced acquisition of Fortis' operations in Belgium and Luxembourg, as well as the international banking franchises, for a total consideration of €14.5 billion.

Sep 22, 2008

Cleary Gottlieb represented Barclays in its agreement to acquire Lehman Brothers' North American investment banking and capital markets businesses.

Sep 08, 2008

Cleary Gottlieb acted for Morgan Stanley, which was in turn the advisor to the United States Treasury, in connection with the conservatorship of Fannie Mae and Freddie Mac described in the press as “the most dramatic market intervention in years.”

As detailed in an announcement by Treasury Secretary Henry Paulson on September 7, the two companies have been placed into conservatorship. As a result, the Federal Housing Finance Agency, Fannie Mae’s and Freddie Mac’s regulator, has gained management control of the companies. Treasury has also established preferred stock purchase agreements with Fannie Mae and Freddie Mac under which Treasury could be required to provide as much as $100 billion to each of the companies, established a new secured lending credit facility for the companies, and initiated a temporary program to purchase Fannie Mae and Freddie Mac's mortgage backed securities in the open market.

Aug 26, 2008

Cleary Gottlieb represented Hewlett-Packard (“HP”), the computer industry giant, in its acquisition of Electronic Data Systems Corporation (“EDS”), a provider of business and technology solutions, including information-technology, applications and business process services, as well as information-technology transformation services. The EDS acquisition has an enterprise value of $13.9 billion. The deal was announced on May 13 and closed on August 26.

HP is a global provider to consumers, businesses and institutions of technology solutions, including IT infrastructure, computing, imaging and printing, with annual revenues totaling approximately $104.3 billion in 2007. Cleary Gottlieb previously represented HP in its 2007 acquisitions of Neoware and Opsware.

Mar 18, 2008

Cleary Gottlieb, as a co-counsel to Deutsche Telekom, won the dismissal of €3.9 billion claims before the Commercial Court of Paris on March 18. The claims, brought in 2005 by Vivendi Universal, were related to a long-standing, multi-jurisdictional battle for the control of PTC, a leading Polish mobile telephone operator.

PTC was founded in 1995 by Deutsche Telekom and Elektrim, a Polish company. Beginning in 1999, Vivendi and Elektrim entered into a series of investment agreements. The agreement established Telco, a joint-venture controlled by Vivendi. Vivendi and Elektrim agreed that Elektrim would contribute its PTC shares to Telco. Deutsche Telekom argued that the transfer was ineffective because it was in violation of the PTC Shareholders' agreement, and commenced arbitration proceedings in Vienna.

In August 2003, while the Vienna arbitration was pending, Deutsche Telekom and Vivendi engaged in settlement discussions. In September 2004, Deutsche Telekom discontinued the settlement discussions. Two months later, the Vienna Tribunal ruled in favor of Deutsche Telekom, deciding that Elektrim's PTC shares were wrongfully transferred to Telco.

In the recent litigation before the Commercial Court of Paris, Vivendi sought more than €3.9 billion in damages on the grounds that Deutsche Telekom wrongfully terminated the settlement negotiations and that Deutsche Telekom's actions eventually resulted in the "spoliation" of Vivendi's investment in PTC.

The Court dismissed Vivendi's claims. In its decision, the Court upheld Deutsche Telekom's defense that given the context of the discussions and since the parties had agreed not to suspend the Vienna arbitration proceedings pending their settlement discussions, they remained free at any time to opt for a litigated, rather than negotiated, settlement of their dispute.