Nov 8, 2016
In a cover story for Canadian Lawyer InHouse, Danny Bradbury explores cross-border M&A, focusing on the energy sector, which has seen a number of cross-border M&A transactions in the past couple years.
The article covers a range of topics related to energy M&A transactions, including the motivations for getting involved and the three phases of an M&A deal – diligence, closure and compliance, and integration – which can be made more complex by cross-jurisdictional issues. The article points out that juggling M&A processes can be daunting for a general counsel, even with the assistance of an external firm. As such, it’s important for a legal team to have a broad range of expertise across practice areas to help in-house counsel deal with different issues as they arise.
John Macfarlane, a partner in Osler’s Corporate Practice Group, tells InHouse that a legal team, which can “include everyone from tax and securities lawyers through to benefit and pensions experts,” will usually have a quarterback as the primary representative to the client. “Often the longest and deepest relationship with the client will be through a corporate lawyer,” says John, who advised the Canadian firm Emera on its acquisition of TECO Energy for US$10.4 billion. As the article reports, the team’s main point of contact plays a critical role in identifying issues and involving other lawyers in appropriate practice areas to deal with issues as needed. The team uses a central data room during the due diligence process, which ideally would be set up early on. However, as John states, this is not always possible, especially if the bid is hostile.
John also comments on the requirements involved in the last phase of an M&A transaction, integration, which takes place after the deal has been approved. During this phase, participants will “unify their resources and processes to operate smoothly together.” As John states, staying in touch with stakeholders is important during integration, but the external counsel helping to guide the acquirer may be less involved at this point. “This is more the bailiwick of in-house counsel working with their various business units to integrate the acquired business into the existing business,” John says. “The success of the transaction ultimately will depend on the post-deal integration and there will be a tremendous amount of resources put into that by the companies.”
To learn more about the cross-border energy M&A process, read Danny Bradbury’s full cover story “Mastering the art of the cross-border deal” in Canadian Lawyer InHouse.