May 13, 2008

Cleary Gottlieb is representing 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 is expected to close later in the year.

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.

Apr 21, 2008

Cleary Gottlieb represented affiliates of TPG Capital in their $2 billion investment in newly-issued common stock, contingently convertible preferred stock and warrants of Washington Mutual, Inc. Existing WaMu institutional investors concurrently invested $5 billion in the bank. The structure of the WaMu capital infusion was widely reported as representing a potential model for future financial institution recapitalizations. The transaction was signed on April 7th and funding was completed on April 21st.

Jan 25, 2008

Cleary Gottlieb represented Citi in 10 concurrent offerings of $19 billion of convertible preferred stock and straight preferred stock. The offerings involved six individually negotiated private placements of $12.5 billion of convertible preferred stock to the Government of Singapore Investment Corporation, the Kuwait Investment Authority, HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud, Capital Research mutual funds, the New Jersey Division of Investment and Citi's former Chairman and CEO Sandy Weill, as well as a $3.17 billion public offering of convertible preferred stock and a $3.72 billion public offering of straight preferred stock. The private and public convertible preferred stock offerings closed on January 23 and the straight preferred stock offering closed on January 25.

Cleary Gottlieb represented Citi on the private placements, and represented the underwriters, led by Citi Global Markets, for the public offerings. Cleary Gottlieb also served as disclosure counsel to Citi in connection with its year-end earnings release.

Jan 23, 2008

Cleary Gottlieb represented Lafarge S.A., the world leader in building materials, in its acquisition of Orascom Building Materials Holding S.A.E. (Orascom Cement) from Orascom Construction Industries S.A.E., an Egyptian construction and building materials group founded by the Sawiris family, for $15 billion (including assumed debt), or €10.2 billion. Orascom Cement is an emerging markets cement leader, with number-one positions in Egypt, Algeria, the United Arab Emirates and Iraq, and with strategic positions in other growth markets in Africa and Asia including Saudi Arabia, Syria and Turkey. The transaction was entered into on December 9, 2007 and closed on January 23, 2008.

The purchase price is being financed by €6 billion in debt and the issuance, through a reserved capital increase, of 22.5 million new Lafarge ordinary shares at a price of €125 per share for a total capital increase of €2.8 billion, to NNS Holding Sàrl, a holding company owned by Nassef Sawiris and his family, which owns 60% of Orascom Construction Industries. Through this investment, NNS Holding will become an 11.4% shareholder of Lafarge, and Nassef Sawiris will be entitled to appoint two members of Lafarge’s board of directors.

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.

Jan 09, 2008

On January 9 2008, the European Commission announced the closure of a three-year antitrust investigation into Apple's online music download agreements with the four major record companies (EMI, SONY BMG, Universal and Warner Music). Closure of the investigation was facilitated by Apple's public announcement that it will within the next six months lower the prices it charges for music on its UK iTunes® Store to match the already standardized pricing on iTunes across Europe. The Commission found that the agreements between Apple and the majors did not violate EU competition rules, and no concessions were made by the record companies. Cleary Gottlieb represented SONY BMG, which is a 50-50 joint venture between Sony Corporation of America and Bertelsmann.

In 2004, the UK consumer organization "Which?" complained with UK and EU competition authorities that Apple's iTunes online music service charged more for music downloads in the UK than in the rest of Europe, and that UK consumers were prevented from downloading music through lower-priced iTunes online storefronts directed at Continental European countries. In March 2007, the EU Commission brought charges against Apple and each of the four major record companies, alleging that the online music download agreements between Apple and the majors contained restrictions on "cross-border" sales within Europe.

The case clarified an important issue of principle, i.e., that it is legitimate for record companies (and other content providers) to limit a license for online content to the territory of individual EU countries and to provide for staggered release of such content across Europe. Restrictions on UK consumer' ability to download music through iTunes online storefronts directed at other countries did not reflect an agreement between Apple and the record companies, but reflected each record company's freedom to determine when and what music content to license for online sale to UK consumers (as well as Apple's unilateral decision not to allow "cross-border" access to iTunes online storefronts). In announcing the closure of its investigation, the Commission explained, "the fact that the same content is not available in all EU countries is not the result of restricted business practices between Apple and the record companies, but of the restricting copyright legislation".

Jun 25, 2007

Cleary Gottlieb represented Samsung Card Co., Ltd. and the selling shareholders in Samsung Card's Won 576 billion (approximately $620 million) common stock IPO, which was the first IPO on the Korea Exchange to include an international tranche for foreign investors. Merrill Lynch acted as international tranche coordinator for the international syndicate. Korea Investment & Securities acted as lead manager for the Korean domestic syndicate. The stock was sold through a public offering in Korea and a Rule 144A/Reg. S offering elsewhere. The deal priced June 14, 2007 and closed June 25, 2007.

Samsung Card is a leading diversified consumer finance company in Korea. The company offers a broad range of financial products and services to individuals, as well as leasing services to individuals and corporate customers. Samsung Card is a member company of the Samsung Group, Korea's largest business group. Samsung Group has interests in the trading, electronics, construction, heavy engineering, chemical, insurance, finance and hotel industries.

Sep 18, 2007

On September 17, the European Court of First Instance rendered judgment in the long-awaited and controversial Microsoft case. Cleary Gottlieb represented RealNetworks, and was co-counsel to the European Committee on Interoperable Systems (ECIS) and the Software and Information Industry Association (SIIA). The firm also advised a variety of clients in the United States and European Union interested in the implications of the case. The case involved two broad issues:

The Court upheld the European Commission's finding of illegal tying of Windows Media Player to Windows, which the Commission had found excluded competition in streaming media players and contributed to the maintenance of Microsoft's desktop software platform monopoly.

The Court also upheld the European Commission's finding of illegal refusal to supply interoperability information that third-party server manufacturers needed to enable their workgroup servers to communicate fully with Microsoft Windows clients and server networks. This resulted in monopolization of server markets, and contributed further to monopoly maintenance of the desktop software platform monopoly.

European antitrust rules, like Section 2 of the U.S. Sherman Act, forbid companies from abusing their dominant position in an industry to the detriment of consumers and the structure of competition. The Microsoft ruling represents a landmark interpretation of that ban. The decision also supports the stance of EU regulator, which has been more inclined than the U.S. Department of Justice to find aggressive behavior by dominant companies as abusive. At the same time, the analysis in the judgment is close to the rule of reason analysis applied by the DC Court of Appeals in Microsoft II.

Feb 21, 2008

Cleary Gottlieb represented Grupo Petersen in its acquisition, through its Spanish subsidiary Petersen Energía, S.A., of a 14.9% interest in YPF S.A. from Repsol YPF S.A. Cleary Gottlieb also represented Grupo Petersen in getting financing for the deal. The purchase price was financed through a $1 billion senior secured loan facility provided by a bank syndicate led by Credit Suisse, Banco Itaú, BNP Paribas and Goldman Sachs, a $1 billion subordinated seller loan from Repsol, and equity. The acquisition closed on February 21.

In addition to the acquisition, Grupo Petersen entered into two option agreements with Repsol pursuant to which Petersen was granted the right to acquire up to an additional 10.1% of YPF’s capital stock within the four years following the closing. Petersen and Repsol also entered into a shareholders agreement providing Petersen with minority shareholder protections as well as the right to appoint the CEO of YPF.

YPF, the largest oil and gas company in Argentina, was privatized by the Argentine government in 1993 and acquired by Repsol in 1999.

Grupo Petersen, founded in 1920 and controlled by the Eskenazi family, is one of Argentina’s largest corporate groups with investments in various industry sectors in Argentina, including engineering and construction activities, banking services, agro-industry and urban maintenance.

Feb 01, 2008

Cleary Gottlieb represented the underwriters, led by Kotak Mahindra Capital Company and UBS Securities India, in an initial public offering by Reliance Power Limited of 260,000,000 equity shares listed on the Bombay Stock Exchange and the National Stock Exchange of India. The $2.93 billion offering is the largest IPO in Indian history. The transaction closed on February 1. 

The global offering was made to investors under Regulation S and Rule 144A.

Reliance Power is developing 13 power projects in India with a combined capacity of over 28 gigawatts at a projected cost of $28.5 billion. Reliance Power is an affiliate of the Reliance ADA Group, one of the largest business houses in India, comprising companies in the telecommunications, financial services, media and entertainment, infrastructure, energy and other sectors.