Walgreen Co. (WAG), the biggest U.S. drugstore chain, agreed to pay $6.7 billion for a 45 percent stake in the U.K.’s Alliance Boots GmbH in an attempt to create a global chain of pharmacies.
Wachtell, Lipton, Rosen & Katz LLP and Allen & Overy LLP advised Walgreens. Simpson Thacher & Bartlett LLP and Darrois Villey Maillot Brochier advised Alliance.
Wachtell’s team was led by corporate partners Andrew R. Brownstein and Benjamin M. Roth. Additional partners on the deal included Michael J. Segal, executive compensation and benefits; Eric M. Rosof, restructuring and finance; and Jodi J. Schwartz and T. Eiko Stange, tax.
A&O’s team was led by partner Justin Steer in Amsterdam. The following partners were also involved: Nicolaus Ascherfeld, Richard Kim and Marc Feider, corporate; Norbert Wiederholt and Ben Fox, banking; Sylvie Watts, incentives; Dana Burstow, pensions; Jim Ford, IP&IT; Matt Townsend, environmental; Mark Mansell, litigation-employment; Christopher Woolf, real estate; Lydia Challen, tax; and Paul Glazener, competition.
The Simpson Thacher team was led by corporate partner Mark Pflug. Other partners on the team included Gary Horowitz, mergers and acquisitions, Steven Todrys, tax, and Joe Tringali and David Vann, antitrust.
Mergers and acquisitions lawyers Alain Maillot and Benjamin Burman and competition lawyers Didier Theophile and Igor Simic, from Darrois Villey also advised Alliance.
Cleary Gottlieb Steen & Hamilton LLP is advising Goldman Sachs, financial adviser to Walgreens. The Cleary Gottlieb team was led by New York partner Ethan Klingsberg.
Walgreen will pay $4 billion cash and the remainder in stock for its biggest deal, with an option to gain full control in about three years, the companies said yesterday in a statement. The stake is being acquired from a group led by KKR & Co. (KKR) and Alliance Boots Chairman Stefano Pessina, who bought the company in a 12.1 billion-pound ($19 billion) buyout five years ago.
The combination gives Walgreen and Alliance Boots, the U.K.’s largest drugstore-chain company, more than 11,000 stores in 12 countries and 370 distribution centers to pharmacies, doctors and hospitals. Walgreen will be able to expand into emerging markets as well, Chief Executive Officer Gregory Wasson said yesterday on a conference call.
Walgreen will have an option to buy the remaining 55 percent of Nottingham, England-based Alliance Boots in about three years. KKR and Pessina will become shareholders in the combined business. Pessina, an Italian billionaire, said on the call he will own an 8 percent stake in Walgreen and doesn’t want to take money out.
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KKR Agrees to Buy Hedge Fund Manager Prisma Capital Partners
Simpson Thacher & Bartlett LLP represented KKR & Co., the private-equity firm run by Henry Kravis and George Roberts, which agreed to buy Prisma Capital Partners LP, a fund-of-hedge- funds manager, advised by Schulte Roth & Zabel LLP.
The Simpson Thacher team includes partners Gary Horowitz, mergers and acquisitions; Jason Herman, funds; Steven Todrys and Katharine Moir, tax; and Andrea Wahlquist, executive compensation and employee benefits.
From Schulte, the partners were led by mergers and acquisitions partners Andre Weiss and Christopher Harrison. Philippe Benedict, on tax, Jennifer Dunn, investment management, and Holly Weiss, employee benefits, also worked on the deal.
Prisma, which is based in New York and had $7.8 billion in assets under management as of April 30, will continue to operate under its own brand, KKR said in a statement June 18. Prisma Chief Executive Officer Girish Reddy will head KKR’s global hedge fund-of-funds business.
KKR and larger competitors Blackstone Group LP (BX) and Carlyle Group LP (CG) have grown or purchased fund-of-funds units to broaden beyond corporate leveraged buyouts. Kravis and Roberts, cousins who started New York-based KKR in 1976 with Jerome Kohlberg, also have branched into stock and bond underwriting, infrastructure investing and real estate.
“Many institutional investors are seeking more liquid alternative investment products, and we believe customized hedge-fund solutions play a key role in meeting that need,” Kravis said in today’s statement.
Reddy created Prisma in 2004 with fellow former Goldman Sachs Group Inc. (GS) partners Thomas Healey and Gavyn Davies. When the deal is closed, probably by the fourth quarter, Healey and Davies will become senior advisers to KKR. Prisma’s management will reinvest the cash proceeds of the sale into Prisma funds, according to the statement.
Prisma will operate as part of KKR’s public markets segment that includes KKR Asset Management, which buys and sells securities such as leveraged loans and high-yield bonds and houses the firm’s first equity hedge fund, started last year by Robert Howard, a former Goldman Sachs trader.
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News Corp.’s GC Gerson Zweifach Takes Over for Klein
News Corp. (NWSA) executive Joel Klein stepped down as the head of the company’s internal committee investigating phone hacking and bribery, passing the role to General Counsel Gerson Zweifach.
The group, known as the Management and Standards Committee, will now report directly to Zweifach, who joined News Corp. in February. The change will let Klein return to his role as chief executive officer of News Corp.’s education unit, according to a statement June 18. The former Justice Department lawyer, who joined News Corp. last year after serving as the chancellor of New York schools, had been running the committee since news of the hacking broke last July.
The management change was made at a board meeting last week in Milan, according to an executive familiar with the matter who asked not to be identified because the decision was private. Klein had no longer been managing the committee on a day-to-day basis in recent months and wanted to return to running the education unit, according to the person. Klein had suggested hiring Zweifach earlier this year, with the expectation that he would eventually take over the internal committee, according to another person with direct knowledge of the matter.
The internal committee has worked closely with London police in its investigations of bribery and hacking by journalists at News Corp.’s U.K. unit. The committee’s findings have led to a number of arrests, including at least four people last week, who have been accused of making or accepting illegal payments for tabloid stories.
Zweifach, who had already served on the standards committee since February, will now report the group’s findings to Viet Dinh, an independent director and chairman of the company’s Nominating and Corporate Governance Committee. The standards committee is currently chaired by Anthony Grabiner and includes William Lewis and Simon Greenberg as full-time members. U.K. law firm Linklaters LLP is legal adviser to the group.
Zweifach worked at Washington-based Williams & Connolly LLP for almost three decades managing antitrust and libel cases before joining the company in February. He succeeded Lawrence Jacobs, who left in June 2011 to pursue other opportunities.
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O’Melveny & Meyers to Open Seoul Office With New Hires
O’Melveny & Myers LLP will open an office in Seoul, South Korea, with Korea practitioners Sungyong Kang and Jinwon Park, who recently joined the firm.
Joseph Kim, a partner and head of O’Melveny’s Korea practice, along with a number of U.S. lawyers at the firm, will work closely with Kang and Park to integrate the new office with O’Melveny’s global platform, once the Ministry of Justice approves the firm’s application.
“Few firms can match O’Melveny’s dedication and success in serving Korean companies,” Kim said. “The Seoul office will allow us to continue our work as trusted advisors and provide them seamless access to our global network of litigators and transactional lawyers.”
O’Melveny has worked with major Korean corporations including Asiana Airlines, for whom it secured the dismissal of claims in In re Korean Air Lines Co., Ltd., which accused Asiana and Korean Air Lines of price-fixing.
The firm has also represented Samsung in multiple patent infringement claims brought by a Japanese competitor, Murata Manufacturing Co., the firm said.
Kang and Park have had experience at both Korean and U.S. law firms. Each of them has more than 20 years of experience representing Korean and multinational clients on cross-border investments, corporate transactions, mergers and acquisitions, international trade, and international litigation and arbitration, the firm said.
The Seoul office will be O’Melveny’s seventh in Asia. The firm has about 130 legal professionals at locations in Shanghai, Hong Kong, Beijing, Singapore, Tokyo, and Jakarta (in an association with Indonesian law firm Tumbuan & Partners).
O’Melveny has approximately 800 lawyers in 15 offices worldwide.
McDermott Hires Transfer Pricing Team in Tax Practice Expansion
McDermott Will & Emery LLP hired a seven person team of tax professional led by lawyers Cym H. Lowell and Mark R. Martin. The lawyers bring a full-service transfer pricing team to McDermott, based in two offices in Texas, which will focus on designing and defending the allocation of income and expense in cross-border transactions. They join the firm from Gardere Wynne Sewell LLP, the firm said. Martin will serve as the head of McDermott’s transfer pricing practice.
Martin, partner John T. Woodruff and an associate, will be based in McDermott’s Houston office. Lowell and three professional advisers, will practice out of a Dallas satellite office.
Lowell works across a range of planning and controversy matters for U.S. and foreign-based multinational companies as well as wealthy individuals. He has handled transfer pricing cases with proposed adjustments in the billions, structured advance pricing agreements on a global basis and advised clients on a range of international tax planning matters, the firm said.
Martin handles transfer pricing matters through unilateral and bilateral processes, the firm said. His global practice includes multinational energy, construction, and chemical clients. Martin has particular specialization in resolving critical transfer pricing issues through emerging dispute resolution processes in the U.S. and other countries.
“Transfer pricing knowledge has become increasingly important in Texas as oil companies and suppliers with significant international operations seek to adapt with more tax efficient structures,” Steven G. Spears, partner-in-charge of McDermott’s Houston office said in a statement. “This group provides us with a highly-branded tax practice and a strong platform to build our tax capabilities in this very important market.”
McDermott has more than 1,000 lawyers, with offices in the U.S., Europe and a strategic alliance in Shanghai.
Shearman Deputy Litigation Group Leader Joins Cahill
Cahill Gordon & Reindel LLP announced that Herbert S. Washer has joined the firm as a partner in the litigation practice group. Washer joins the firm from Shearman & Sterling LLP, where he served as the litigation group’s deputy practice leader.
Washer has over two decades of experience representing clients in a variety of securities and antitrust-related civil litigation, as well as regulatory enforcement and criminal matters, the firm said in a statement.
Cahill Gordon has about 300 lawyers in New York, Washington and London.
Baker Botts Hires Environment Lawyer Cagle in Austin
Environment lawyer Molly Cagle has joined Baker Botts LLP as a partner in the firm’s Austin office. Cagle was previously a partner at Vinson & Elkins LLP.
Cagle litigates and negotiates settlements for clients under the Clean Water Act, Clean Air Act, Resource Conservation and Recovery Act, and their state analogs, as well as the Superfund statute. She counsels clients on audit issues, under both the state audit law and federal policy. Cagle has particular expertise in water issues, the firm said.
“Molly’s unparalleled experience in resolving disputes over natural resources is a significant addition to our environmental practice,” Steve Leifer, chair of the environmental department at Baker Botts, said in a statement.
Baker Botts has 725 lawyers at 13 offices North America, the Middle East, Europe and Asia.
Asarco Seeks Pollution Accord Reversal, Cites Criminal Probe
Grupo Mexico SAB (GMEXICOB)’s Asarco unit asked a U.S. judge to throw out the $219.5 million settlement of its Omaha, Nebraska, lead- contamination case, claiming the true source of the pollution was concealed by a U.S. Environmental Protection Agency official who is under criminal investigation.
Gregory Evans, of Integer Law Corporation and Asarco’s lead lawyer, said the company was motivated to seek withdrawal of its settlement over the Omaha pollution claims when it learned of the criminal probe.
“We are confident the court will order EPA to return some or all of the $219.5 million Asarco paid when it sees and hears all of the evidence of EPA’s data manipulation, document withholding and document destruction,” Evans said in an e- mailed statement.
Asarco, which filed the largest environmental bankruptcy case in U.S. history to resolve pollution at about 100 sites nationwide, was misled into paying a “grossly inflated” settlement amount to resolve an EPA claim that a company smelter contaminated the Omaha site, Asarco attorneys said yesterday in a filing in federal bankruptcy court in Corpus Christi, Texas.
For the past year, Asarco has accused Robert Feild, the EPA’s Omaha lead project coordinator, with leading an evidence- destruction campaign that hid an agency study indicating the Nebraska property was probably contaminated by lead paint peeling from old houses rather than Asarco smelter emissions.
Asarco recently learned “that a criminal investigation is being conducted by the U.S. Attorney’s Office and the EPA Office of Inspector General relating to potential obstruction of justice by Feild regarding Omaha Lead Site-related litigation,” according to the filing.
Feild didn’t immediately reply to a voice-mail message seeking comment on the filing.
Eileen McMahon of the EPA inspector general’s office said she has read about the accusations concerning the Nebraska official and under agency policy couldn’t confirm or deny the existence of such a probe.
Wyn Hornbuckle, a Justice Department spokesman, declined to comment on the filing in an e-mail.
The case is In re Asarco LLC, 05-21207, U.S. Bankruptcy Court, Southern District of Texas (Corpus Christi).
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