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$39bn AstraZeneca deal caps off pharma boom year

News over the weekend of AstraZeneca’s $39bn deal to acquire Alexion Pharmaceuticals has capped off the 2020 pharma boom in style with what has been touted as the largest acquisition of a US target company and the largest acquisition financing of the year.

Elsewhere, advisers benefited from another big-ticket transaction as the bidding war for security services company G4S ramped up with a bid from Allied Universal, and an equity valuation of £3.8bn. 

AstraZeneca said on Saturday (12 December) that it had agreed to acquire Boston-based Alexion as the buyer continues to make strides towards the development of a coronavirus vaccine with the University of Oxford.

Such a high-profile deal will be a huge shot in the arm for Freshfields Bruckhaus Deringer’s. American ambitions as its significant investment last year in the New York team led by Ethan Klingsberg appears to be paying dividends with an instruction by AstraZeneca. The predominantly New York-based team acting for the buyer was led by corporate partners Klingsberg, Sebastian Fain, and John Fisher (Silicon Valley) employee benefits partner Lori Goodman, tax partner Robert Scarborough, finance partner Kyle Lakin, DC-based antitrust partners Mary Lehner and Justin Stewart-Teitelbaum, IP partner Mena Kaplan and litigation partners Adam Siegel and Meredith Kotler.

The team also included a London contingent including corporate partners Julian Long, Jennifer Bethlehem and Kate Cooper and antitrust partner Simon Priddis.

Wachtell, Lipton, Rosen & Katz acted for Alexion with a team led by corporate partners Daniel Ne, Mark Gordon and Sabastian Niles, antitrust partner Nelson Fitts, executive compensation partners Adam Shapiro and Erica Bonnett, restructuring partner Eric Rosof and tax partner Tijana Dvornic.

Meanwhile, Macfarlanes acted on the UK aspects of the deal for Alexion, with a team led by corporate partners Harry Coghill and Charles Martin and including tax and reward partner Peter Abbott.

The $39bn deal includes $60 in cash per $175 share of Alexion and 2.1243 AstraZeneca American depository shares, representing a 40% premium on Alexion’s closing Friday stock price of $120.48.  Underpinning the financing is a $17.4bn bridge facility provided by Morgan Stanley, JP Morgan and Goldman Sachs.

Elsewhere, Cleary Gottlieb Steen & Hamilton, Linklaters  and Freshfields are all involved as Allied Universal last week sought to trounce a hostile bid from rival GardaWorld for G4S.

The recommended offer would see Allied Universal acquire the entire issued and to be issued share capital of G4S for 245 pence per share, with the deal having an aggregate equity value of around £3.8bn. The G4S board of directors have announced that they intend to unanimously recommend that G4S shareholders accept the Allied Universal offer and reject the offer from GardaWorld of 235 pence per share.

Allied Universal is 43% owned by funds controlled by Warburg Pincus and 35% by a fund managed by Caisse de dépôt et placement du Québec, along with other financial investors and management. The combination of Allied Universal and G4S would create a leading integrated security business with revenues of around $18bn, operations in more than 90 countries and an extensive portfolio of blue-chip clients across the public and private sectors.

Cleary is lead counsel and antitrust counsel to Allied Universal with a team led by New York partner Jim Langston and Sam Bagot in London. The global antitrust team was led by partners Jeremy Calsyn in Washington DC and Christopher Cook in Brussels.

New York partner Michael Albano is advising on executive compensation and Jason Factor, Corey Goodman and Richard Sultman are advising on tax. Alexis Collins in DC and Jonathan Kelly in London are advising on litigation and enforcement.

Freshfields is also acting for the bidder, with a team led by partners Alison Smith and Paddy Ko in London. Linklaters partners Aedamar Comiskey, Nick Rumsby and Kanyaka Ramamurthi led the deal for G4S.

Ben Spiers at Simpson, Thacher & Bartlett acted for GardaWorld and Kirkland & Ellis acted for BC Partners, which owns a 51% stake in GardaWorld, led by corporate partners David Higgins and Tom Bartram and also including investment funds partner Andy Shore.

Cleary M&A partner Sam Bagot told Legal Business: ‘Deals in the public market have not always worked out. There is not always a meeting of minds as to valuations. This is what’s driving activity in the public market – with the exchange rate and the pandemic, buyers can go shopping at attractive prices.  On the public side, there will be more of the same. If the pandemic clears up quickly and the Brexit situation becomes clearer, UK assets will remain relatively better value than US assets.’

Fellow Cleary partner Tihir Sarkar, said: ‘In the FTSE 250, most of the UK companies have global revenues and don’t derive income solely from the UK. While there are macro issues they are well-hedged in some shape or form.  One dampener could be the National Security Bill that is coming into force next year. It is quite wide-ranging and could make overseas investors into the UK wary and tone down the volume of deal activity.’

nathalie.tidman@legalease.co.uk 


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