Warren Buffett’s Berkshire Hathaway Inc. and Jorge Paulo Lemann’s 3G Capital agreed to buy HJ Heinz Co. for about $23 billion as the billionaires increased their bets on consumer products. Munger, Tolles & Olson LLP represented Berkshire Hathaway. Kirkland & Ellis LLP represented 3G Capital, and Davis Polk & Wardwell LLP provided legal counsel to the ketchup maker.
The New York-based Kirkland team acting for 3G Capital is led by corporate/mergers and acquisitions partners Stephen Fraidin, William Sorabella and David Feirstein, debt finance partner Jay Ptashek, capital markets partners Joshua Korff and Michael Kim, and corporate partners Christopher Torrente and Daniel Michaels. Also on the Kirkland team were executive compensation partner Scott Price, tax partners Greer Phillips and Steven Clemens, private funds partner Andrew Wright, competition partner Mark Kovner and litigation partner Peter Doyle.
Davis Polk, advising H.J. Heinz, had a corporate team including partners Arthur F. Golden, John A. Bick and Michael Davis. Partner Kyoko Takahashi Lin is providing employee benefits advice. Partner Kathleen L. Ferrell is providing tax advice. Partners James A. Florack and Michael Kaplan are providing financing advice. Partner Ronan P. Harty is providing antitrust and competition advice.
Wachtell, Lipton, Rosen & Katz is serving as legal adviser to the Transaction Committee of Heinz’s Board of Directors. Wachtell Lipton’s team is led by corporate partners Edward D. Herlihy and David E. Shapiro.
Sullivan & Cromwell LLP represents Centerview Partners, financial adviser to H.J. Heinz. The S&C New York-based mergers and acquisitions team includes partners Frank Aquila and Brian Hamilton together with associate Marshall Yuan. Willkie Farr & Gallagher LLP represented BofA, also financial advisor to Heinz. The deal was handled by partners Steven Seidman and Laura Delanoy.
The buyers will pay $72.50 a share, compared with the Feb. 13 closing price of $60.48, according to a statement. Berkshire will spend about $12 billion to $13 billion on the deal for the maker of condiments and Ore-Ida potato snacks, Buffett told CNBC. The deal will also be financed with cash from 3G affiliates, plus the rollover of existing debt, and is valued at about $28 billion including debt, according to the statement.
Heinz will retain its corporate headquarters in Pittsburgh, according to the statement. The company traces its roots back to 1869, when Henry John Heinz and neighbor L. Clarence Noble began selling grated horseradish, according to Heinz’s website. The company introduced its famous Tomato Ketchup in 1876.
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Latham, Weil Among Law Firms on US Airways Merger with American
Twelve law firms including Latham & Watkins LLP and Weil Gotshal & Manages LLP were involved in the US Airways Group Inc. combination with bankrupt AMR Corp.’s American Airlines in an $11 billion all-stock deal to create the world’s largest carrier.
The creditors committee’s legal counsel is Skadden, Arps, Slate, Meagher & Flom LLP and Togut, Segal & Segal LLP.
Latham & Watkins is representing US Airways Group with a deal team led by Silicon Valley corporate partners Pete Kerman, Tony Richmond and Josh Dubofsky, New York bankruptcy partners D.J. Baker and Paul Harner and Los Angeles bankruptcy partner Robert Klyman.
Assistance was provided to the teams by Latham San Francisco tax partner Kirt Switzer; Silicon Valley benefits and compensation partner James Metz; Chicago benefits and compensation partner Robin Struve; New York finance partners Kevin Fingeret and Graeme Smyth; New York corporate partner Greg Rodgers; Los Angeles real estate partner Kim Boras; and Houston environmental partner Joel Mack.
Cadwalader’s Charles Rule and Andrew Forman provided antitrust counsel. O’Melveny & Myers partners Bob Siegel, Chris Hollinger, and Mark Robertson advised on labor issues for US Airways. Dechert partner Paul T. Denis is leading a team serving as antitrust counsel to US Airways.
Weil’s team on behalf of American was led by corporate partner Thomas Roberts and bankruptcy partner Stephen Karotkin. Additional partners included Glenn West, Corey Chivers and Ted Waksman, corporate; Alfredo Pérez and Stephen Youngman, business finance and restructuring; Stuart Goldring, tax; Michael Kam, executive compensation and employee benefits; Richard Rothman, litigation; and Holly Gregory, public company advisory group.
Jones Day is representing American Airlines as U.S. antitrust co-counsel with Paul Hastings. The Jones Day team is led by partners Joe Sims and J. Bruce McDonald, antitrust and competition. Paul Hastings antitrust co-counsel included: MJ Moltenbrey and Tim Longman. American is represented in its Chapter 11 case by John J. Gallagher, Scott M. Flicker, Jon A. Geier, Neal D. Mollen and Todd C. Duffield of Paul Hastings.
Debevoise is special aircraft counsel to American Airlines in its bankruptcy case. The Debevoise team is led by partners Jasmine Ball, John T. Curry and Richard F. Hahn and includes partners Vadim Mahmoudov, Robert J. Staffaroni, My Chi To and Michael E. Wiles, the firm said. Dallas corporate partner Mary Korby led a K&L Gates team.
Skadden is advising the unsecured creditors committee of AMR Corp., the parent company of American Airlines. Leading the Skadden team are corporate restructuring partners John Butler, Jr. and Jay Goffman, together with partners John K. Lyons, Ron Meisler and Felicia Gerber Perlman, corporate restructuring; Eric Cochran and Sean Doyle, mergers and acquisitions; James Keyte, antitrust; Sarah Ward, banking; Neil Leff, executive compensation and benefits; Jose Esteves, intellectual property and technology; John Furfaro, labor and employment; Albert L. Hogan III, litigation; Paul J Huff, Jr., real estate; David Polster, tax; and Don J. Frost, Jr., environmental.
Shearman & Sterling LLP represents Barclays, financial advisors to US Air. The Shearman & Sterling team included partners Peter Lyons and David Connolly mergers and acquisitions; Douglas Bartner, bankruptcy and reorganization; and Alan Goudiss, litigation.
Chief Executive Officer Doug Parker of US Airways will run the new airline, which will retain American’s name, as AMR CEO Tom Horton becomes chairman, the companies said yesterday in a statement. AMR creditors will own 72 percent of the stock, while 28 percent will go to US Airways shareholders.
The merger will produce annual savings and new revenue totaling more than $1 billion by 2015, the airlines said, and cap a wave of consolidation that swept up five of the 10 biggest U.S. carriers since 2005.
The case is in re AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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AB InBev to Sell U.S. Corona Rights to Meet Deal Demands
Skadden Arps Slate Meagher & Flom LLP and Sullivan & Cromwell LLP are advising Anheuser-Busch InBev NV, the world’s biggest brewer, which offered to cede full control of Corona distribution in the U.S. to Constellation Brands Inc. for $2.9 billion in a bid to salvage its purchase of Grupo Modelo after U.S. regulators sued to block the deal. Nixon Peabody LLP advised Constellation in the deal.
The Skadden team includes mergers and acquisitions partners Paul Schnell, Thomas Greenberg and Marie Gibson; antitrust partners Steven Sunshine, Ian John, James Keyte and Karen Hoffman Lent; litigation partner Gregory Craig; tax partner Victor Hollender; and intellectual-property partner Bruce Goldner.
Nixon Peabody’s mergers and acquisitions team was led by Jim Bourdeau, Jeff LaBarge and John Moragne. The Nixon Peabody finance team was led by Craig Mills, Sarah Abel and John LaBoda. Nixon Peabody real estate attorneys Paul Schrier and J.R. Garabaldi also advised Constellation in the transaction.
Nixon Peabody worked closely with Constellation’s in-house counsel including Tom Mullin, EVP, general counsel; Ron Fondiller, SVP, commercial counsel; David Sorce, SVP, corporate counsel; and Barbara LaVerdi, associate counsel. Nixon Peabody also worked closely with McDermott Will & Emery LLP, antitrust counsel; Baker McKenzie LLP, which provided international counsel; and Kenyon & Kenyon LLP on licensing issues, the firm said.
Constellation will gain Modelo’s brewery in Piedras Negras, which is in Mexico near the Texas border, and perpetual rights for the Corona and Modelo brands in the U.S., Leuven, Belgium- based AB InBev said in a statement.
The deal is aimed at appeasing U.S. authorities, who sued to block AB InBev’s proposed $20.1 billion purchase of the rest of Modelo on Jan. 31, arguing the merger would hurt competition and lead to higher prices. AB InBev controls almost half the U.S. beer market, while Corona is the country’s biggest imported brand. The complaint triggered plunges in shares of AB InBev, Constellation and Modelo.
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Wachtell Advises Cardinal Health on AssuraMed Purchase
Wachtell Lipton Rosen and Katz advised Cardinal Health Inc., the second-largest U.S. drug distributor by revenue, said it agreed to buy closely held AssuraMed for $2.07 billion to add home delivery services of health-care products.
AssuraMed shareholders Clayton, Dubilier & Rice and GS Capital Partners were advised by Debevoise & Plimpton LLP. The Debevoise deal team is led by partner Paul S. Bird and includes partners Jonathan F. Lewis, Kevin A. Rinker and David H. Schnabel.
Wachtell Lipton’s team is led by corporate partners David A. Katz and David K. Lam and consists of: Michael J. Segal, executive compensation and benefits; Deborah L. Paul, tax; and Eric M. Rosof, restructuring and finance.
The purchase price will be $1.94 billion once the present value of tax benefits is added, Dublin, Ohio-based Cardinal Health said in a statement yesterday. The company plans to finance the deal with $1.3 billion in senior unsecured notes and the rest in cash.
AssuraMed, based in Twinsburg, Ohio, has about $1 billion in revenue and more than 1 million customers. With the purchase, Cardinal Health will start supplying 30,000 products in areas such as diabetes and wound care to patients in their homes, an important service as the elderly and chronically ill increasingly receive care there, according to the company.
The deal is expected to close by early April, and to add 2 to 3 cents a share to adjusted earnings in 2013, the company said. In 2014, the acquisition will add at least 18 cents a share, Cardinal Health said.
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Cross-Border Employment Lawyer Joins DLA Piper
DLA Piper LLP hired Ute Krudewagen, formerly with Baker & McKenzie LLP, in the firm’s labor and employment practice as a partner in the Silicon Valley office.
Krudewagen advises clients on complex labor and employment matters, including background checks, employment agreements, discrimination and harassment claims and social media issues, the firm said. She also counsels on employment issues associated with cross-border and national transactions, including mergers and acquisitions, the firm said.
DLA Piper has 4,200 lawyers in more than 30 countries throughout the Americas, Asia Pacific, Europe and the Middle East.
Merck to Pay $688 Million to Resolve Litigation Over Vytorin
Merck & Co. said it will pay $688 million to resolve class- action litigation claiming it defrauded shareholders by withholding adverse results of a clinical trial of the anti- cholesterol drugs Vytorin and Zetia.
The settlement needs the approval of U.S. District Judge Dennis Cavanaugh in federal court in Newark, New Jersey. He was to oversee a trial starting March 4. The accord benefits holders of securities of Merck and Schering-Plough, which Merck acquired in 2009. The companies had earlier joined to develop Vytorin, which combined Merck’s Zocor and Schering’s Zetia.
The drug trial sought to determine whether adding Zetia to less-expensive Zocor helped lower atherosclerosis more than Zocor alone. Investors claimed the drug, Enhance, was an “unqualified disaster” showing no benefit to Vytorin in slowing atherosclerosis compared to Zocor. Investors said Merck withheld those findings for a year before releasing top-line results on Jan. 14, 2008, and full results on March 30, 2008.
“We think it’s a terrific settlement,” said Daniel Berger, an attorney for investors at Grant & Eisenhofer PA. “When you have material information about the results of a drug trial on an important product, you’re required to disclose it so that investors can make an informed decision.”
Merck, based in Whitehouse Station, New Jersey, said holders of Schering-Plough securities will receive $473 million and holders of Merck securities will get $215 million, according to the statement. Merck anticipates that it will receive $493 million in insurance recoveries, the company said.
“This agreement avoids the uncertainties of a jury trial and will resolve all of the remaining litigation in connection with the Enhance study,” Merck general counsel Bruce N. Kuhlik said.
“Hopefully, this will serve as a deterrent in the pharmaceutical industry,” said investor attorney Salvatore Graziano of Bernstein Litowitz Berger & Grossmann LLP. “It continues to be a widespread problem that companies report good results in clinical drug trials quickly and delay or don’t report at all adverse results.”
The case is In re Schering-Plough Corp./Enhance Securities Litigation, 08-cv-397, U.S. District Court, District of New Jersey (Newark).
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