It’s midnight on 30 January 2007. The hotly anticipated auction of one of Europe’s largest steelmakers is about to commence and the rival bids from India and Brazil are in. Trainee Max Neuberger looks back on a takeover battle across continents.
In the first three seats of his Herbert Smith training contract, Max has circumnavigated the globe – both geographically and legally.
Starting his training contract in March 2006 with a seat in real estate, he then moved to corporate, where he helped to advise the Indian multinational Tata Steel on its blockbuster £6.2 billion acquisition of the Anglo-Dutch steelmaker Corus. With that deal successfully completed, Max then moved to his third seat in Herbert Smith’s Tokyo office, where he is currently having “the time of his life”.
“Tokyo is an incredible place to have a seat,” he says. “Having worked in London and helped with a major global deal focused on India, Tokyo is a completely new cultural and business experience again. The variety of work and exposure to different environments within my first two years at Herbert Smith has not only been extremely interesting but has also provided me with invaluable experiences, which will doubtless prove useful throughout my career. The Legal Practice Course seems a million miles away.”
Tata Steel’s takeover of Corus in January 2007 was a milestone for economic globalisation, and made banner headlines the world over. Before the takeover, Tata Steel was already India’s largest private sector steel company, with annual revenues of US$5 billion (£2.5 billion). Corus was Europe’s second largest steel producer, formed through a merger between the former British and Dutch national steel companies. The takeover – the largest ever outward investment by an Indian company – followed a three-month bidding battle between Tata and Brazilian rival CSN, and confirmed the emergence of Indian corporations as major players on the world stage.
Throughout the acquisition process, Tata Steel was advised by a joint team drawn from the corporate and finance divisions of Herbert Smith and its Alliance firm Stibbe. Led by Nimi Patel, head of the firm’s India Group, the 43-strong team was drawn from an array of practice areas including corporate, employee incentives, employment, environment, EU/competition, finance, pensions and tax, and included three lead partners and 20 associates, supported by five trainees. The team’s collective combination of deep industry and deal expertise with global reach were invaluable for the client, enabling it to withstand the pressures, navigate a path through the complex Takeover Code process, and ultimately win the deal.
“The scale and global profile of the deal were matched by its complexity,” says Nimi Patel. “We had to manage the twists and turns of a takeover battle across time zones from South America to Asia, plus the nail-biting drama of a Takeover Panel auction. When the bidding went down to the wire, the tension was electric.”
Tata finally clinched the deal in the early hours of 31 January 2007, when the UK’s Takeover Panel confirmed that its bid had won the auction. Tata Steel joined the global premier league as the world’s sixth largest steel group.
“On the night of the auction we had around 40 people from Herbert Smith, Tata and other advisers in the deal room on our conference room floor,” recalls Nimi. “It was the culmination of thousands of hours of work from the whole team and a major success for corporate India on the world stage.”
Max was also integrally involved throughout the deal – as well as on the big night. “I got involved in the deal as soon as I arrived in my corporate seat,” he explains. “I started by helping to draft and proof-read the announcement. Then, as the deal progressed, there were many high-level decisions and changes being made and it was a challenge keeping all the documentation up to date.”
The span of the deal included intense peaks of activity, between which Max was able to focus on other high-profile work. “As far as I was concerned, there were three peaks,” he recalls. “The first peak was when we announced the deal, when I was largely involved in verifying the announcement. The second was when the offer document was released, and I was at the printers overnight, overseeing its production. And the final peak was the auction, which was particularly exciting because nobody had any idea who would win. Throughout this period, I was also involved in a smaller deal, advising BSkyB on its £100 million takeover of 365 Media.”
Looking back, what Max remembers most clearly from the Tata Steel deal was the great sense of teamwork. “The deal went on for a long time – beyond the duration of my six-month seat – and the team stayed pretty much unchanged throughout. Also, the whole firm was involved. Even people here in the Tokyo office were called on from time to time. Because the team remained the same and everyone was putting in lots of hours, we all got to know each other well and that made it more enjoyable. This was helped by the fact that everyone made a real contribution to the successful outcome. When we finally won the auction, there was an air of celebration in the office. It was very satisfying to see such an impressive team combine to perform a job so well.”
Following completion of the deal, the hard work of the entire Herbert Smith team was recognised when the firm won “Corporate Team of the Year” at The Lawyer Awards 2007 for its role on this transaction.