Energy M&A Transactions
McDermott Will & Emery is an international law firm that provides diversified legal services and maintains a leading global energy and commodities practice. More than 65 lawyers and professionals from the firm’s Energy Advisory and Corporate Advisory Practice Groups are involved primarily in the energy industry, with teams located in Boston, Chicago, Houston, London, New York and Washington, D.C. The international energy and commodities team includes McDermott lawyers based in our London, Brussels, Düsseldorf, Munich and Rome offices, who offer our clients a full range of services. Through our strategic alliance with MWE China Law Offices, we are also able to offer our services to energy and commodity clients doing business in China.
Our clients in the energy industry include power marketers and energy trading firms, agricultural cooperatives and trading companies, agribusinesses, major financial institutions such as commercial and investment banks and institutional investors, electric utilities, independent power producers, retail electric and natural gas service providers, major oil companies, independent oil exploration and production companies, gas pipelines, and gas marketers and shippers.
We regularly advise our energy clients on corporate transactional matters, including mergers and acquisitions, joint ventures, private equity investments and other commercial transactions, physical and financial trading transactions, project finance, structured finance, and trading controls and policies. In providing these services, we are able to draw upon our deep knowledge of the energy and commodities industries and related regulation, our strong corporate skills, and the experience of lawyers in our market-leading tax, employee benefits, intellectual property, antitrust and regulatory practices to provide full-service, results-oriented transactional advice.
Mergers & Acquisitions, Joint Ventures & Private Equity Investments
We regularly represent domestic and foreign entities in the acquisition of, sale of and investment in trading portfolios, generation, exploration, production, storage, transportation, distribution, marketing, energy technology, and other energy- and commodity-related businesses. In the past several years, our lawyers have advised leading U.S. and multinational corporations and investment banks on numerous mergers and other business combination transactions involving publicly traded and privately owned companies in the energy and commodities fields. We have one of the world’s leading energy and commodity sector private equity practices, and have played a principal role in hundreds of private equity transactions involving both public and private companies, and ranging in size from less than $100 million to more than $45 billion. In addition, we regularly evaluate and negotiate various joint venture interests in agribusiness, oil and gas, electric power, pipeline and related projects.
Energy M&A Transactions
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Represented Irving Oil Limited in a joint venture with Repsol YPF, S.A. The joint venture, Canaport LNG Limited Partnership, is developing a liquefied natural gas (LNG) import and regasification terminal at Irving's Canaport facility in Saint John, New Brunswick, Canada. The Canaport LNG terminal was commissioned on July 22, 2009, is initially capable of delivering 1 billion cubic feet per day of regasified LNG into the U.S. Northeast and Canadian markets, and could be expanded to 2 billion cubic feet per day when the market is ready for additional natural gas supplies. The Canaport LNG terminal includes a deep water multi-purpose jetty, which has been built to accommodate LNG tankers and oil tankers and is among the very few terminals in the world that can accept an LNG ship of the Q-Max and Q-Flex’s size. The Canaport LNG terminal is the first of its kind to be built on the east coast of North America in 30 years and the first ever to be built in Canada.
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Represented the power marketing affiliate of an international financial institution in connection with the sale of its U.S. power and natural gas trading business to an affiliate of a major international oil company. In December 2009, the parties executed a purchase and sale agreement and mirror transaction confirmation under which the seller agreed to transfer to the buyer the market risk associated with the trading business. If certain trades are not novated to the buyer by a specified date, the credit risk associated with those trades will transfer to the buyer.
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Represented Macquarie Group subsidiary Macquarie Cook Energy (MCE) in MCE’s acquisition of the downstream gas assets of Constellation Energy. The acquisition involved natural gas assets that move up to 10 billion cubic feet of gas per day. McDermott represented MCE in all phases of the acquisition, including negotiating the purchase and sale agreement, handling the tax, FERC and antitrust regulatory issues, and structuring pre-and post-closing transactions that shift certain risks from seller to buyer prior to the transfer of the underlying assets.
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Represented J. Aron & Company, a wholly owned subsidiary of The Goldman Sachs Group, Inc., in connection with its acquisition of the international commodities trading business of Constellation Energy Commodities Group, Inc. (CECG). Under the terms of the deal, J. Aron purchased CECG's international gas, power, coal, emissions and freight trading businesses and related agreements. J. Aron also acquired CECG’s uranium trading business by purchasing the equity of a UK affiliate of CECG. A U.S. and London-based team of McDermott lawyers advised on all aspects of the deal, including the structuring, which involved the analysis and deployment of complex derivatives, as well as providing tax, employment, competition/antitrust and regulatory input, both in the United States and the United Kingdom. The transaction required various regulatory approvals from the European Commission, the UK Financial Services Authority and other international regulatory authorities.
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Represented Barclays Bank PLC in connection with its acquisition of the U.S. power and gas, base metals and crude oil trading businesses of UBS AG. UBS agreed to transfer to Barclays the market risk associated with those trading businesses. UBS and Barclays also executed a transfer process agreement establishing the procedures by which UBS will transfer to Barclays the trading contract portfolio with more than 300 counterparties.
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Represented Merrill Lynch & Co., Inc., and its wholly owned subsidiary, Merrill Lynch Commodities, Inc., in their purchase of the U.S., Canadian and European energy trading business of Entergy-Koch, LP, a joint venture formed by Entergy Corporation and Koch Industries, Inc. The transaction was structured as an equity acquisition of Entergy-Koch’s Canadian and European businesses and as an asset purchase of the U.S. business. An international and multi-discipline McDermott team handled all aspects of the acquisition in the United States, Canada and Europe, including the energy regulatory, corporate/M&A, tax, intellectual property, litigation and regulatory due diligence, as well as employee benefits, antitrust and real estate issues. McDermott secured regulatory approvals of the deal from the U.S. Federal Energy Regulatory Commission, the UK Financial Services Authority and various competition authorities in the United States and Europe.
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Represented Morgan Stanley in its acquisition of substantially all of the wholesale power trading portfolio of El Paso Marketing, L.P. (EPM), a subsidiary of El Paso Corporation. As part of the sale, EPM entered into new transactions with Morgan Stanley that offset certain long-dated power positions in EPM’s remaining power portfolio. McDermott handled all of the transactional, tax, antitrust and regulatory aspects of the transaction for Morgan Stanley. In addition, McDermott represented Morgan Stanley in securing novations of the transactions from EPM to Morgan Stanley.
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Represented Morgan Stanley in its acquisition of the wholesale power trading portfolio of Duke Energy Trading and Marketing. McDermott also negotiated with more than 30 different counterparties to secure novations of the transactions from Duke to Morgan Stanley within 60 days of the execution of the purchase agreement.
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Represented Barclays Capital, the investment division of Barclays Bank PLC, in its acquisition of substantially all of Duke Energy North America's multibillion-dollar portfolio of physical power contracts, natural gas contracts and derivatives contracts. The McDermott team handled all aspects of the transaction, including the due diligence, M&A, energy regulatory, tax and antitrust issues. McDermott also assisted Barclays Capital in securing regulatory approvals and third-party consents and in novating the transactions from Duke and its affiliates to Barclays Bank.
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Represented Morgan Stanley Capital Group in the purchase and transfer of Pinnacle West’s trading portfolio, compromised of physical and financial power and gas trades, as well as interstate gas transportation agreements.
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Represented investment banks and futures commission merchants in evaluating potential acquisitions of, and regulatory issues applicable to, commodity brokerage firms, electronic trading facilities and internet-based forex trading systems.
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Represented American Renewables, LLC, in the sale of 100 percent of its membership interests in Nacogdoches Power, LLC, to Southern Power Company. Nacogdoches Power is in the process of developing an approximately100 megawatt nameplate capacity biomass-fired power plant near Nacogdoches, Texas, which Southern Power Company, as its new owner, will bring to completion.
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Represented Constellation Energy Group in the divestiture of the assets comprising its wholesale power trading business in the Western Electricity Energy Council power region to Eagle Energy Partners.
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Represented Reliant Energy, now RRI Resources, in the restructuring of its $1 billion plus credit sleeve provided by Merrill Lynch Commodities in connection with the sale of Reliant Energy Retail Holdings and retail power subsidiaries to NRG Energy.
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Represented Constellation Energy’s Projects & Services Group in acquiring the energy services company CLT Efficient Technologies.
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Represented Constellation Energy in its acquisition of Water & Energy Savings Corporation.
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Represented Babcock & Brown in the acquisition of all of the issued and outstanding membership interests of Coastal Maritime Stevedoring, Coastal Maritime Services, and Portside Maintenance and Repair, from ScanAmerican Group.
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Represented Befesa Agua in connection with its purchase of a controlling interest in NRS Consulting Engineers and Waterbuild.
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Representing Bank of America and Merrill Lynch in connection with several of the energy-related approvals necessary to consummate their merger.
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Represented Morgan Stanley in the purchase of all the interests in Power Contract Finance, LLC, a special-purpose vehicle with a valuable long-term contract to sell electricity from El Paso’s Bayonne QF to PSE&G. The transaction involved the negotiation of the equity purchase agreement, guarantees, a set-off and netting agreement, various assignment agreements and legal opinions. In addition, the contract was restructured so that the energy could be supplied from the competitive wholesale energy market rather than from a specific power plant.
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Represented Giant Industries, Inc., and its subsidiary Phoenix Fuel Co., Inc., in connection with Phoenix Fuel's acquisition of all of the stock of Empire Oil, Co., a lubricants and petroleum distributor in Southern California.
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Represented Morgan Stanley in the purchase of all the equity interests in Utility Contract Funding II, LLC, a special-purpose vehicle limited liability company which, simultaneously with its purchase by Morgan Stanley, received assignment of a valuable long-term contract to sell all of the electricity of Calpine’s Newark and Parlin qualifying facilities (QFs) to JCP&L (the UCFII transaction). At the time of the assignment, the contract was restructured so that the energy sold to JCP&L could be supplied from the market instead of from the QFs.
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Represented Merrill Lynch & Co. in connection with its purchase of SPE Alstom, a company that owns 16 electric power substations, three transmission lines and two geothermal plants in Mexico.
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Represented Irving Oil Corporation in their purchase of Johnson & Dix's residential and commercial heating oil business and several convenience retail and retail gasoline outlets in New Hampshire and Vermont.
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Represented Irving Oil Limited in a joint venture with Westcoast Energy Inc. (which was thereafter acquired by Duke Energy Corporation) with respect to a 260-megawatt power project involving gas powered electricity and steam generation units at the Bayside power plant in Saint John, New Brunswick, and in the subsequent acquisition of the 75 percent interest in the project held by Duke Energy Corporation, thereby increasing Irving Oil’s interest to 100 percent.
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Represented Irving Oil Company, Limited, in a joint venture with TransCanada Energy Limited to develop and operate an 88-megawatt cogeneration facility located at the Irving Oil Refinery in Saint John, New Brunswick.
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Represented the petroleum storage business unit of a large specialized leasing and transportation company in its acquisition (and later disposition) of an interest in a refined petroleum products storage, trading and marketing company owned by the domestic subsidiary of a large Japanese company.
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Represented Halliburton Company in connection with its $1.6 billion sale of the Dresser Equipment Group to an investor group led by First Reserve Corporation and Odyssey Investment Partners, LLC.
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Represented Newfield Exploration Company in its $1.1 billion disposition of substantially all of its Gulf of Mexico assets.
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Represented Commercial Bank in acquiring a large portfolio of crude oil futures positions.
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Represented Sinopec, a large Chinese company, in its acquisition via an offshore vehicle of a privately held U.S. company that owned oil and gas licenses in Kazakhstan.
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Represented a mid-stream MLP in its acquisition of a large private joint venture.
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Represented Newfield Exploration Company in its $575 million acquisition of Inland Resources Inc. and its $174 million acquisition of Denbury Offshore, Inc.
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Represented Shell Oil Company in its disposition of one of its global chemical businesses.
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Represented Newfield Exploration Company in its $750 million acquisition by merger of EEX Corporation and the formation of Treasure Island Royalty Trust.
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Represented a national U.S. energy company in the $95 million purchase of the equity of an Omaha, Nebraska-based natural gas supplier with distribution across the Great Plains and Midwest.
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Represented a southeastern utility company in the approximately $100 million acquisition of a merchant power plant to serve its utility supply obligations, including separation of the transmission assets into a separate transaction to preclude FERC jurisdiction on the acquisition of the facility.
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Represented European renewable energy company Naturener S.A., owned by the Belgian industrial group SAPEC (indirectly through the Tharsis Group), the Spanish savings bank Caja Castilla La Mancha and a private investor based in New York, in its acquisition of Energy Logics, Inc., and Great Plains Wind & Energy, LLC.
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Represented an independent investor in the acquisition of a local gas distribution company from a utility.
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Represented a Fortune 50 U.S. energy company in the divestiture of its oil and gas properties in the Barnett Shale area of north Texas.
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Represented a major Spanish energy company in the acquisition of Gulf of Mexico oil and gas interests.
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Represented a major Spanish energy company in the acquisition of wind-power companies with wind projects in Montana and Alberta, Canada.
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Represented a Fortune 50 U.S. energy company in multiple acquisitions of oil and gas properties in the Barnett Shale area of north Texas.
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Represented a Fortune 50 U.S. energy company in the disposition of multiple downstream markets in the United States.
Selected International Energy M&A Transactions
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Represented Azpetrol in the sale of its 50 percent equity interest in Binagardi Oil and Gas (Azerbaijan) to Rosneft.
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Represented Nippon Oil Exploration and Production in multiple auctions for UK North Sea exploration and production license interests.
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Represented Nippon Oil Exploration and Production in the successful joint bid for a UK North Sea license in the 24th Offshore Licensing Round by the UK Government and preparation of collateral joint operating agreement documentation.
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Represented Nippon Oil Exploration and Production in a reorganization of Nippon's joint venture with Stratic Energy related to exploration drilling in a license block in the UK North Sea.
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Represented Nippon Exploration and Production in an asset exchange of UK North Sea license interests between Nippon and Stratic Energy.
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Represented an international energy company on the prospective acquisition of power-related assets in Scotland.
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Represented Kvaerner ASA with respect to the financing aspects of the U.S.$100 million sale of its hydrocarbons and process technology businesses to Yukos Oil.
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Represented a leading energy company in relation to the sale of their interest in a 216-megawatt gas/naphtha-fired combination cycle power project in India.
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Represented Apple Oil and Gas in the hostile offer by Seymour Pierce, on behalf of Apple Oil and Gas, for the entire issued share capital of Aminex, an Irish company listed on the London and Dublin stock exchanges.
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Represented Merrill Lynch on the purchase of the energy trading business of Entergy-Koch, LP.
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Represented a major energy company on prospective power-related trading and transactional activity in Poland and on prospective wind-power acquisitions globally.
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Represented Challenger Infrastructure Fund in acquiring two petrochemical storage terminals in China, including in the design of the offshore acquisition structure, legal due diligence and drafting the definitive agreements.
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Represented Kvaerner, an international engineering and construction group, in the sale of its hydrocarbon and process technology divisions to Yukos Oil Company, a Russian oil company.
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Represented Europe’s largest electricity provider in the structuring and negotiating of a joint venture for the EUR 8 billion purchase of a listed company through block purchases and a tender offer bid.
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Advised on the EUR 4.3 billion acquisition of a holding of an Italian listed energy group, including the negotiating and structuring of various put and call agreements and related security packages.
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Advised on the EUR 1.5 billion acquisition of a 20 percent stake in an Italian listed energy company and subsequent EUR 5.5 billion tender offer bids for 100 percent of the capital of such company and its listed subsidiary.
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Obtained merger control approval for Merrill Lynch’s purchase of the energy trading business of Entergy-Koch, LP, in Germany.
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Advised an international investment bank in connection with the acquisition of an energy provider from a German bank.
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Advised PKN Orlen through to successful clearance by the European Commission of its high-profile acquisition of the Czech company Unipetrol.
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Advising on the antitrust aspects of a projected acquisition by a gas producer in Brussels.
