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CrossBorder Investment & M&A: Risk Management and Mitigation


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CrossBorder Investment & M&A: Risk Management and Mitigation

  1. 1. CROSS-BORDER INVESTMENT AND M&A: RISK MANAGEMENT AND MITIGATION February 13, 2014 MODERATOR: Alexander B. Kasdan, Managing Director, DelMorgan & Co. EXPERT PANEL: Neil Morganbesser, President and CEO, DelMorgan & Co. Michael V. Gisser, Partner, Skadden, Arps, Slate, Meagher & Flom LLP Nathan D. O’Malley, Partner, Gibbs Giden Locher Turner Senet & Wittbrodt LLP David J. Karl, President, Asia Strategy Initiative
  2. 2. WEBCAST LOGISTICS: The audience is in listen-only mode Attendees are encouraged to type questions into the “chat” field Questions will be addressed at the end of the program Power Point link is available at MCLE / CPE processing link is available at For technical support, please contact GoToMeeting support: 800 263 6317 1
  3. 3. Alexander B. Kasdan, Managing Director, DelMorgan & Co., has more than twenty years of investment banking, real estate, corporate law and corporate strategy experience. Mr. Kasdan has executed over 100 domestic and cross-border transactions totaling more than $10 billion in overall volume in a variety of industries. Prior to joining DelMorgan, Mr. Kasdan founded Convergence Capital Partners, LLC, a boutique investment banking advisory and real estate investment firm and was an investment banker at Peter J. Solomon Company, Credit Suisse First Boston and Merrill Lynch, in New York and Moscow, Russia. 100 Wilshire Blvd. Suite 750 Santa Monica, CA 90401 (310) 980-1718 Mr. Kasdan practiced law with O’Melveny & Myers LLP (formerly O’Sullivan Graev & Karabell LLP) and Paul, Hastings, Janofsky & Walker LLP (formerly Battle Fowler LLP), where he specialized in mergers and acquisitions, private equity and corporate finance transactions. In addition, Mr. Kasdan served as Corporate Counsel in charge of business development at Schlumberger Ltd., a global oilfield and information services company. Mr. Kasdan graduated magna cum laude from Middlebury College with a B.A. degree in Economics and Italian and was elected to Phi Beta Kappa during his junior year. In addition, he holds a J.D. degree from Columbia University Law School and has studied at the University of Florence in Italy. Mr. Kasdan is admitted to the Bar in the State of New York. Mr. Kasdan is a Senior Advisor to Governance and Transactions LLC, an advisory firm established in 2003 by Mr. James L. Gunderson, former Secretary and General Counsel of Schlumberger Limited, to assist boards, management and owners with corporate governance, compliance, structuring and strategic transactions. 2
  4. 4. Neil Morganbesser is co-Founder and President & CEO of DelMorgan & Co. where he provides senior leadership within the firm and helps oversee all client engagements. Mr. Morganbesser is also CEO of Globalist Capital LLC, DelMorgan’s broker-dealer affiliate. Mr. Morganbesser has over 20 years of experience providing financial and strategic advice to a full range of clients, including entrepreneurs, large corporations, governments, family businesses, private equity funds, and special committees of public companies. Mr. Morganbesser has been affiliated with some of the leading institutions in the world, and his experience ranges from representing the offshore owners in the sale of a small, private U.S. company for $10 million to representing the special committee of a large, public company in a $9 billion negotiated management buyout with a highly complex financial structure. 100 Wilshire Blvd. Suite 750 Santa Monica, CA 90401 (310) 319-2000 Mr. Morganbesser has truly global experience with the most sophisticated transactions, across a broad range of industries and in a large number of jurisdictions, as the lead banker on a wide variety of transactional and other advisory assignments, including domestic and cross-border mergers, acquisitions, joint ventures, sales and divestitures, restructurings, special committee assignments, unsolicited acquisitions and hostile defense. With transactional experience in over 30 countries, Mr. Morganbesser has successfully advised on over 75 transactions. Until May 2008, Mr. Morganbesser was the head of West Coast and Asia Mergers & Acquisitions at Bear Stearns & Co., as a Senior Managing Director based in Los Angeles. Prior to joining Bear Stearns in May 2001, Mr. Morganbesser was an investment banker in the Mergers, Acquisitions and Restructuring Department at Morgan Stanley (in New York from 1993-1998 and in Los Angeles from 1998-2001). From 1990-1993, Mr. Morganbesser was a corporate and M&A attorney at the preeminent New York law firm of Wachtell, Lipton, Rosen & Katz. Mr. Morganbesser graduated with an A.B. magna cum laude in Applied Mathematics / Economics from Harvard University (Phi Beta Kappa) in 1986 and received his J.D. and M.B.A. degrees (Order of the Coif, with honors) from Stanford University in 1990. 3
  5. 5. Michael V. Gisser is a Partner at Skadden, Arps, Slate, Meagher & Flom LLP, Mergers and Acquisitions, Technology and International. Mr. Gisser is based in Los Angeles and leads the firm’s Asia-Pacific practice as the firm’s senior M&A partner in the region. He has been continuously active in cross-border control transactions for more than 20 years. Mr. Gisser advises clients throughout the world in a range of industries with respect to corporate and international transactions, representing major firm clients in the real estate, technology and entertainment industries, among others. 300 South Grand Avenue Suite 3400 Los Angeles CA 90071-3144 1.213.687.5213 As a result of his extensive cross-border experience, Chambers Global 2013 profiled Mr. Gisser as a “leading lawyer” in both China and the United States. In addition, he has been recognized in Corporate/M&A by Chambers USA and Chambers Asia-Pacific. The Los Angeles Daily Journal consistently has listed Mr. Gisser as one of California’s top “Rainmakers.” He teaches at the Stanford Directors’ College in Chin 4
  6. 6. Nathan D. O'Malley, Partner, Gibbs Giden Locher Turner Senet & Wittbrodt LLP, leads the International Business and Dispute Resolution practice group. A recognized international arbitration practitioner, Mr. O'Malley has extensive experience representing clients in transactions and disputes throughout Europe, the Middle East, Asia and Africa. Prior to joining Gibbs Giden, Mr. O'Malley practiced for eleven years in Europe with various Benelux law firms. In his arbitration practice Mr. O'Malley represents clients in the distribution, energy, construction and technology industries. 1880 Century Park East, Suite 1200 Los Angeles California 90067 (310) 552-3400 Mr. O’Malley has acted in a wide range of matters including disputes arising out of infrastructure mega-projects in the Persian Gulf, intellectual property licenses between US and Asian parties and master distribution agreements covering Europe and the Middle East. He is the author of a leading text on international arbitration procedure entitled The Rules of Evidence in International Arbitration: an Annotated Guide (Informa, 2012) and has acted in cases seated in a number of key jurisdictions such as Geneva, Singapore, London and Abu Dhabi. Additionally, he has been appointed on multiple occasions to act as an international arbitrator, in particular in cases administered by the ICC International Court of Arbitration in Paris and the Permanent Court of Arbitration in The Hague. 5
  7. 7. Asia Strategy Initiative David J. Karl President 213-392-7273 David J. Karl is President of the Asia Strategy Initiative, an analysis and advisory firm focused on the intersection of politics and economics in Asia, and heads its practice on South Asia. He is also a co-founder and senior director of Geoskope LLC, an intelligence company focused on key emerging economies. He previously served as director of studies at the Pacific Council on International Policy and as an adjunct professor of international relations at the University of Southern California and Occidental College. In addition, David served as project director, Joint Task Force on Enhancing U.S.-Indian Economic Relations. He received his doctorate in international relations at the University of Southern California, writing his dissertation on the India-Pakistan strategic rivalry, and took his masters degree in international relations from the Johns Hopkins University School of Advanced International Studies. 6
  8. 8. ORGANIZER & HOST: 100 Wilshire Blvd. Suite 750 Santa Monica, CA 90401 (310) 995-6579 Anna Spektor, Founder, Expert Presence / Expert Webcast Anna Spektor is a seasoned business development consultant and founder of Expert Presence, a leading management consultancy dedicated to helping professionals and senior executives effectively reach and engage target audiences, develop and solidify stakeholder relationships and increase brand awareness locally and nationwide. Anna is also the organizer and host of Expert Webcast and Expert Forum, leading thought leadership platforms delivering knowledge and insight on current issues and the latest developments in law, accounting and finance. 7
  9. 9. MAJOR TOPICS •  The global outlook for cross-border investment and M&A activity •  Legal risks particular to investments in emerging markets; specifically in technology and natural resources •  Including political risk into the analysis of potential cross-border investment opportunities •  Special protections afforded to foreign investors by bilateral and multi-lateral investment treaties •  Resolving disputes arising out of international M&A and cross-border investments •  Economic risks particular to cross-border and emerging market investments •  Raising capital for cross border investment and M&A: explaining the risks to potential investors •  Transaction considerations and structures: strategic, legal, tax, accounting •  Effects of risk on valuation and successful deal execution •  Cultural considerations •  Case studies 8
  10. 10. TRANSACTIONAL CONSIDERATIONS •  •  •  •  •  •  •  •  •  •  •  •  Drivers of cross-border deals Strategic v. financial buyers Due diligence and access to information Decision making, timing and process Economic risks particular to cross-border and emerging market investments Raising capital for cross border investment and M&A: explaining the risks to potential investors Understanding local capital markets Transaction considerations and structures: strategic, legal, tax, accounting Effects of risk on valuation and successful deal execution Cultural considerations Post-transaction integration Case studies 9
  11. 11. Execu&on)of)Acquisi&ons)in)Emerging)Countries) Overall)Considera&ons) “Emerging)countries)are)not)another)planet.))People)are)economically)literate,)and)at)the) end)of)the)day)are)driven)by)ra;onal)financial)mo;ves)when)doing)M&A”) ) Cultural) ) ) Poli&cal) ) !  Differences)and) !  Poli.cs)is)everywhere) !  Understanding)the)signals) !  Be)pa.ent)and)realis.c )) !  Adds)uncertainty)and) complexity) ) ) Regulatory) ) !  Complex)and)involving)a) mul.tude)of)regulatory) bodies) !  Impacts)foreign)investment) restric.on;)control,) structure,)etc. )) 10
  12. 12. 2014 POLITICAL RISK OUTLOOK IN ASIA •  Most militarized region in the world – Increased China-Japan tensions •  Heightened emerging market turbulence – New currency crises? New capital controls? •  Year of Truth for Chinese commitment to economic reform and financial liberalization •  Will Abe-nomics run out of gas? •  Key elections in India and Indonesia – Implications for investor sentiment •  Year of Truth for the Trans-Pacific Partnership •  Will the Regional Comprehensive Economic Partnership gain traction? •  Political instability in Thailand David J. Karl, Asia Strategy Initiative 11
  13. 13. MITIGATING LEGAL RISK CHECK LIST •  There are two types of laws which will impact the transaction: (1)  regulatory and mandatory law; and (2)  the law of the contract. •  Choose a governing law early within the transaction (LOI or MOU stage). •  If a potential dispute would involve more than one possible jurisdiction, arbitration is the preferred choice. •  The choice of an arbitral institution has considerable impact on the quality of the arbitrator who will hear your case. •  The venue or place of arbitration is a designation that has legal consequences. 12
  14. 14. INVESTMENT TREATIES •  Bilateral Investment Treaties or BITs are agreements between two nations governing standards of fair treatment afforded to foreign investors. •  Other agreements, including Multilateral Free Trade (NAFTA) or Bilateral Free Trade Agreements (Korea-US FTA)may also include investor protection chapters. •  These agreements may grant the investor a right to file a claim (wrongful expropriation of assets) before an international arbitral tribunal. •  Relevant for investment in sensitive sectors, or those that involve regulatory licenses or concessions, or entities that are governmental or quasi-governmental. 13