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Cms annual review 2012


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Cms annual review 2012

  1. 1. CMS Legal Services EEIG is a European Economic Interest Grouping that coordinates an organisation of independent member firms. CMS Legal Services EEIG provides no client services. Such services are solely provided by the member firms in their respective jurisdictions. In certain circumstances, CMS is used as a brand or business name of some or all of the member firms. CMS Legal Services EEIG and its member firms are legally distinct and separate entities. They do not have, and nothing contained herein shall be construed to place these entities in, the relationship of parents, subsidiaries, agents, partners or joint ventures. No member firm has any authority (actual, apparent, implied or otherwise) to bind CMS Legal Services EEIG or any other member firm in any manner whatsoever. CMS member firms are: CMS Adonnino Ascoli & Cavasola Scamoni (Italy); CMS Albiñana & Suárez de Lezo, S.L.P. (Spain); CMS Bureau Francis Lefebvre S.E.L.A.F.A. (France); CMS Cameron McKenna LLP (UK); CMS DeBacker SCRL/CVBA (Belgium); CMS Derks Star Busmann N.V. (The Netherlands); CMS von Erlach Henrici Ltd (Switzerland); CMS Hasche Sigle, Partnerschaft von Rechtsanwälten und Steuerberatern (Germany); CMS Reich- Rohrwig Hainz Rechtsanwälte GmbH (Austria); and CMS Rui Pena, Arnaut & Associados RL (Portugal). CMS offices and associated offices: Amsterdam, Berlin, Brussels, Lisbon, London, Madrid, Paris, Rome, Vienna, Zurich, Aberdeen, Algiers, Antwerp, Beijing, Belgrade, Bratislava, Bristol, Bucharest, Budapest, Casablanca, Cologne, Dresden, Duesseldorf, Edinburgh, Frankfurt, Hamburg, Kyiv, Leipzig, Ljubljana, Luxembourg, Lyon, Milan, Moscow, Munich, Prague, Rio de Janeiro, Sarajevo, Seville, Shanghai, Sofia, Strasbourg, Stuttgart, Tirana, Utrecht, Warsaw and Zagreb. ©CMS Legal Services EEIG (June 2012) A nnual review 2 0 1 1 – 2 0 1 2 AnnualReview2011–2012
  2. 2. Created by Wardour Portrait and people photography by Theo Cohen Printed by Park Communications on FSC® certified paper. Park is an EMAS certified CarbonNeutral ® Company and its Environmental Management System is certified to ISO14001. 100% of the inks used are vegetable oil-based, 95% of press chemicals are recycled for further use and, on average, 99% of any waste associated with this production will be recycled. CMS Legal Services EEIG Frankfurt am Main Barckhausstrasse 12-16 60325 Frankfurt am Main Germany T: +49 69 717 01-500 F: +49 69 717 01-550 E: Scan the code with your smartphone to visit contactfacts and figures CMS Key fa c t s Countries 28 46 >2,800 36 >5,000 140 €808m Turnover of all CMS firms in 2011 calendar year Offices Lawyers New partners in 2011 Total employees Chambers Band 1 rankings Chambers Band 2 rankings The European provider of legal and tax services One of the reasons clients choose CMS is that we have the most extensive European footprint of any firm. Other reasons include our cross-border sector and practice expertise and our outstanding reputation in key markets. 52 80 Cities
  3. 3. contents 1 Introduction & Leadership Team 02 CMS in Portugal 04 Banking & Finance 06 Commercial 08 Competition 10 Consumer Products 12 Corporate 14 Dispute Resolution 16 Employment & Pensions 18 Energy 20 Hotels & Leisure 22 Infrastructure & Project Finance 24 Insurance 26 Intellectual Property 28 Lifesciences 30 Private Equity 32 Real Estate & Construction 34 Tax 36 Technology, Media & Telecommunications 38 Client Services 40 Growth Markets 42 People & Development 44 Corporate Social Responsibility 46 Governance 48 In this year’s Annual Review
  4. 4. D espite the challenging market conditions across Europe and turbulence in the world economy, 2011 was a year of growth and expansion for CMS. As the largest provider of legal and tax services in Europe, we increased our fee income, which for the second year running amounted to more than €800 million. Our cross-border teams of sector specialists competed successfully for business, winning a substantial number of pitches. In last year´s Annual Review, we announced our co-operation agreement with leading Portuguese law firm Rui Pena, Arnaut & Associados. We are delighted to be able to report that, after several months of working together successfully, our Portuguese friends officially joined CMS on 1 January 2012, a year ahead of schedule. CMS Rui Pena & Arnaut, as the firm is now known, will expand our reach in Iberia and in Portuguese- speaking countries worldwide. This Annual Review displays the work of CMS over the past year across practices, industry sectors and countries. It reinforces our claim to be the biggest provider of legal services in Europe, covering more jurisdictions with more lawyers than any of our competitors. The Annual Review also shows how CMS works on complex, cross-border transactions and really understands the business issues facing our clients. Our success would not be possible without our people. For lawyers at every stage of their career, the CMS Academy provides a learning programme of business-related skills that complements their regular legal training. For all staff, the CMS Induction Course gives new joiners the key facts about CMS and helps them navigate their way around the CMS world. Looking ahead, we are confident that our broad geographical coverage and deep expertise will enable CMS to continue to provide the service that our clients need. With no end in sight to the uncertain economic situation across many of the jurisdictions in which we operate, we will be maintaining this approach. I hope that this Annual Review gives you a good impression of the people behind CMS and of the values and principles that shape what we do. As always, if you have any questions or thoughts, we hope that you will get in touch with us. Cornelius Brandi Chairman of the Executive Committee Welcome to the 2011–2012 CMS Annual Review CMS had a year of growth in 2011. We increased fee income and won a large number of pitches introduction 2 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12
  5. 5. Duncan Weston London Pierre-Sebastien Thill Paris Dolf Segaar Amsterdam Peter Huber Vienna José Luís Arnaut Lisbon Carlos Peña Boada Madrid Stanislas van Wassenhove Brussels Hubertus Kolster Berlin Managing partners’ group Pietro Cavasola Rome Patrick Sommer Zurich chairman Cornelius Brandi executive director Matthew Gorman See page 48 for more on CMS Governance the cms L E A D E R S H I P T E A M 3 Our leadership team i
  6. 6. CMS adds Portuguese capacity cms in portugal 4 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 Client Law Firm of the Year, CMS in Portugal Chambers Europe Award for Excellence 2012 C MS welcomed a leading Portuguese law firm as a new member on 1 January 2012. This represents CMS’ 52nd office, while Portugal is its 28th country. With a history dating back to 1964, the new member firm is well established in the Portuguese market. It also maintains a network of relationships with other law firms in Angola, Brazil and Timor, enabling CMS to meet the needs of its clients in these jurisdictions. A large number of CMS’ 60 lawyers and tax advisers in Portugal are rated as ‘leaders in their field’ by the influential client guide Chambers Europe. The office is also highly regarded across numerous practice areas by the Europe, Middle East and African edition of The Legal 500. Explaining his firm’s decision to join CMS, Portuguese founding Partner José Luís Arnaut comments: “The move will allow the firm to reinforce its Iberian strategy, while becoming a European powerhouse.” “This adds an important jurisdiction to our European growth strategy,” says CMS Chairman Cornelius Brandi. “CMS in Portugal can continue to build on its longstanding, excellent reputation, while simultaneously strengthening our European offering to clients.”
  7. 7. I nternational Bristol Amsterdam Brussels UtrechtLondon Edinburgh Aberdeen Luxembourg Antwerp Paris Leipzig Lyon Strasbourg Madrid Lisbon Seville Casablanca Algiers Rome Milan Zurich Ljubljana Vienna Bratislava Budapest Zagreb Sarajevo Tirana Belgrade Sofia Bucharest Prague Warsaw Kyiv Moscow Munich Dresden Berlin Hamburg Duesseldorf Cologne Frankfurt Stuttgart CMS offices Rio de Janeiro Beijing Shanghai
  8. 8. banking & finance 6 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 It was a finance deal that was advantageous to all the parties involved. It paved the way for new investment in Serbia’s state-owned telecoms provider, Telekom Srbija. And debt-laden Greek telecoms company OTE was able to inject some much-needed cash into its balance sheet. The deal was heralded as one of the largest finance transactions in south- eastern Europe in 2012. The role of the CMS Prague-based Central and Eastern Europe banking team was to advise the client, UniCredit, as one of the lead arrangers of the loan to Telekom Srbija. The syndication of the loan was heavily over-subscribed, with 19 banks taking part. Most of the proceeds of the loan in the €470 million deal were intended to help Telekom Srbija buy back 20% of its shares from OTE. The remainder refinanced its existing loan facility. The Serbian government owns the remaining 80% of Telekom Srbija. “This was a unique deal in terms of public interest, volume, structure and the size of the syndicate,” says CMS Banking Partner Mark Segall, who led the deal. “Banks were eager to be part of it and the syndicate kept growing as the transaction evolved.” Telecoms loan for share buy-back When advising high-profile, cross- border lenders on a complex deal to provide finance for a major global company, it helps to have offices around the world. That was certainly the case in 2011, when an integrated banking team from CMS, comprising lawyers from Amsterdam, Hamburg, London and Madrid, advised the lenders of a €205 million syndicated loan to Bominflot Group, one of the world’s largest independent traders of bunker oil for ships. Deutsche Bank AG and HSH Nordbank AG were key lenders, while ABN AMRO Bank, ING Bank and others also provided funds to the syndicate. The loan was designed to provide Bominflot with operational funding, but the money also replaces the group’s existing finance arrangements. The deal was structured as an umbrella loan agreement, with all banks using standardised loan terms to supply funding direct to Bominflot. CMS’ role in the deal was to advise Deutsche Bank and HSH Nordbank in their function as the loan’s facility agent, as well as advising Deutsche Bank Luxembourg in its role as the loan’s security agent. CMS in Hamburg co-ordinated the advice to Deutsche Bank and HSH Nordbank across a number of CMS offices. CMS in London also co-ordinated the production of key securities assignment documents in countries with an English law heritage: Gibraltar, Hong Kong and Singapore. More recently, CMS’ clients on this deal have asked the firm to revisit Bominflot’s syndicated loan. Towards the end of 2011, Bominflot announced it was merging with fellow worldwide bunkering business Mabanaft GmbH & Co. KG. CMS has a market-leading reputation for banking and finance across European markets. As our recent deals demonstrate, we regularly act for some of Europe’s largest corporates and banks on multimillion-euro transactions. CMS prides itself on achieving workable solutions, whether we are structuring complex cross-border finance deals or handling intercreditor arrangements CMS offices involved Amsterdam, Hamburg, London, Madrid Oil trader refinancing CMS offices involved Belgrade, Prague CM S a d v i s e d t h e l e n d e r s o f a € 2 0 5 m i l l i o n s y n d i c a t e d l o a n t o B o m i n f l o t G r o u p € 470 m i l l i o n d e a l
  9. 9. 7 banking & finance CMS Partners head up US equity initiative Best Capital Markets Law Firm of the Year in Spain – Corporate Intl. The Budapest Banking & Finance team is ranked in Tier 1 by all legal directories (Chambers, Legal 500, IFLR) Awards and rankings US securities Partner Daniel Winterfeldt leads a team charged with developing CMS’ international capital markets practice. Based in London, Winterfeldt is founder and co-chair of The Forum for US Securities Lawyers in London, a trade association representing more than 1,500 US-qualified lawyers and market participants from law firms and financial institutions in the City’s capital markets. The Forum engages in thought leadership on the application of, and compliance with, US securities issues in London. The innovative service that Winterfeldt provides via the Forum includes an initiative focused on the complex matter of issuer reliance on an exemption from registration under the US Investment Company Act of 1940. This was established after five prominent New York law firms issued a memorandum on the international application of the exemption to equity issues, which, in some cases, could cause problems for participants in the London market. The Forum’s procedures capture the range of market practices employed by issuers. “If you work for a non-US investment company that wants to sell its shares to US investors, it’s helpful if you can find a way to exempt yourself from the US Investment Company Act,” Winterfeldt says. “In many situations, our newly developed toolkit will allow you to do just that. It’s based around a flexible menu of possible procedures, each with their own points to consider.” The draft toolkit can now be used by issuers and underwriters accessing the US market from London. A roundtable event at CMS in London in December 2011 attracted more than 40 investment banks, law firms and market makers. Matthias Strasser from CMS in Vienna says: “With stakeholders ranging from the Bank of America to Deutsche Bank providing feedback on the toolkit, it’s pretty clear it will be well used.” For more details, visit The reach of CMS across the European continent is impressive and lends itself well to a strong cross- border practice Chambers Global 2012 T h e t o o l k i t h e l p s c l i e n t s e x e m p t t h e m s e l v e s f r o m t h e U S I n v e s t m e n t Co m p a n y A c t Corrections to commercial property values in several European countries have had a knock-on effect on real estate investors. The loan-to-value covenants of some property investment facilities are no longer being met. As a result, many facilities have required restructuring. This was the issue facing The Royal Bank of Scotland International Limited and The Royal Bank of Scotland plc (RBS) when they asked CMS to help them renegotiate their existing loan facility to Invesco Property Investment Trust Limited (IPIT). An important element of this deal involved a combined CMS Banking and Real Estate team, supported by Corporate, reviewing RBS’ existing security over IPIT’s pan-European property portfolio. The CMS team then assessed what impact IPIT’s proposed restructuring would have Protecting against property trust perils on the banks’ security over the suggested restructured loan. Together, lawyers from Belgium, France, Germany, Spain, the Netherlands and the UK helped ensure that the banks’ security was enhanced or at least that the restructured deal fitted within the existing security package in each jurisdiction. CMS Finance Partner Ian McGarr says: “Commercial property prices in many European countries show no signs of recovery, so banks want to restructure loan facilities to real estate investors. Our pan-European Banking and Real Estate teams make us ideally placed to assist banks and real estate investors.” CMS COUNTRIES involved Belgium, France, Germany, Spain, the Netherlands, the UK
  10. 10. commercial 8 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 T his year saw the launch of an official CMS group specialising in commercial law. The CMS Commercial Law Group works across more than 40 offices in Europe and beyond and has access to more than 400 specialist lawyers. Across CMS, almost one-fifth of our Partners operate in this specialist practice area. The CMS Commercial Law Group was established to provide clients, particularly multinationals, with a one-stop service for their commercial law needs. Besides advising on pure commercial law issues, such as terms and conditions, distribution, IT and supply agreements, the new group also covers areas including data protection and outsourcing. Sarah Hanson, the CMS Head of the group, has ambitious plans for her team. Together with her cross-border colleagues, she has already begun marketing it to clients, developing new products and engaging in internal team-building. For the benefit of clients, the CMS Commercial Law Group has started to roll out a series of cross-border comparative guides on commercial law issues. As many legal concepts do not cross national boundaries, these guides aim to help clients understand where differences between countries occur. The first guide to be published outlined how different rules apply to the legal concept known as the ‘battle of the forms’. Essentially, this concept refers to the successful party when two parties each believe their contractual terms should prevail. A new guide covering distribution and agency arrangements is currently in production and more are set to follow. An important aim of the group is to share knowledge about commercial law developments internationally. As well as producing cross-border guides, the group has developed a series of commercial training webinars for clients. Also, internally, it organised its first pan-CMS associates’ training weekend in Zurich earlier this year, along with the TMT sector group. The new group is likely to improve awareness of CMS’ cross-border commercial law expertise. “We’ve set ambitious targets to raise our profile and we must ensure this expertise is more widely recognised,” Dirk Loycke, the group’s Deputy Head, says. “We’re already acting on significant client matters and winning recognition from legal directories such as Juve in Germany.” D e CM S Co m m e rcia l L aw G ro u p is o p g e r i cht o m cli ë nte n te vo o r zi e n va n e e n o n e - s to p Co m m e rcia l s e r v i ce* * “The CMS Commercial Law Group was established to provide clients with a one-stop Commercial ser vice” Commercially minded A new, dedicated Commercial Law Group operates Europe- wide and further adds to CMS’ expertise, client offering and broad geographic reach
  11. 11. commercial 9 What’s the most significant case you’ve ever handled? Advising Takeda Pharmaceutical on its €9.6 billion acquisition of Swiss drug company Nycomed. Despite all the long hours, it was not only my most significant case, but also one of the most fun matters I’ve worked on. That was largely due to the fantastic team that I was working with. What work are you most proud of? Advising Camelot on the establishment of the EuroMillions lottery when it originally launched in France and Spain and then the subsequent expansion to other European countries, namely Austria, Belgium, Ireland, Luxembourg, Portugal and Switzerland. It represented a first in many ways, but unfortunately I’m still waiting for that winning ticket! If you could change one law, what would it be? The law that prohibits eating mince pies on Christmas Day that was introduced in Britain by Oliver Cromwell. Cromwell, the ‘Lord Protector’ who temporarily overthrew the English monarchy in the 17th century, believed that Christmas was plagued by the superstitions of the Roman Catholic Church and he also thought the tradition had pagan roots. If one or more EU member states leaves the euro, what happens to all the contracts signed with businesses resident in those countries? That is the topic of a new report, Eurofit: How to get in shape to deal with eurozone risks, spearheaded by our CMS team in London. The report highlights a range of legal risks that any upheaval may cause and summarises those common contract clauses that could cause problems. It also suggests what steps clients can take to minimise their risk exposure, wherever possible. A wide range of issues is considered in the document, from currency payment options to supply chain issues and force majeure clauses to termination triggers. 30 seconds with: S arah H ans o n CMS in London Don’t end up being short-changed Eurofit: How to get in shape to deal with Eurozone risks PUBLICATIONSi It was not only my most significant case, but also one of the most fun, due to the team commenT Coming to a contract near you – a common European sales law? Gerd Leutner, CMS in Berlin By the time you read this report, a new pan-European sales regulation will have made good progress towards its adoption. The European Commission is pushing for the new legislation to be approved soon, possibly by the end of 2012. While the proposed regulation is intended to ease international trade, its use will not be compulsory. Parties will remain free to base their contracts on national sales laws or rules based on a United Nations (UN) treaty if they prefer. In order to be bound by the new European sales rule, all parties must actively ‘opt in’ to the new regime. Like existing national sales laws, certain provisions of the new European regulation, such as conditions relating to the return of faulty goods, cannot be modified even if all parties want them to be. But other provisions can be varied if all parties agree. At present, it is too early to say whether the draft rule is more or less onerous than existing national sales laws. This is something CMS is currently investigating. But our initial reaction is that the actual contents of this new law will not result in extra costs for the companies who use it. Instead, the main challenge for most organisations will be the need to learn a new additional sales law regime and how to make appropriate use of it. Another change resulting from the new rule is that, for the first time, the European Court of Justice will gain the power to rule on disputes that arise from the legislation. This means the regulation will be applied consistently across Europe. By contrast, under the current UN sales law regime, national courts in each EU country tend to give slightly different interpretations of the meaning of the treaty.
  12. 12. 10 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 competition Measuring up the competition From training clients on competition law compliance to helping companies threatened with European Commission fines, CMS’ Competition Group is a leader in its field Ensuring competition compliance across borders Today, if a multinational company is the target of a competition authority ‘dawn raid’ investigation in one country, it is often subject to similar raids in others. The existence of bodies such as the European Competition Network or International Competition Network means that investigations into alleged anti-competitive behaviour are likely to be cross-border, co-ordinated and very challenging for any company involved. To reduce the likelihood that clients will be targeted in this way, CMS’ Competition Law Group offers comprehensive competition law compliance training all over Europe. One of the most significant compliance programmes that CMS helped with in the past 12 months was for longstanding client K+S, a leading supplier of salt and fertilisers. CMS provided competition law compliance training in 20 countries for the company. The training programme undertaken by K+S comprised two elements, the first being guidance on competition law relevant to the management and all sales forces in the organisation. The second part comprised ‘dawn raid’ training and a series of checklists for company personnel most likely to be under scrutiny if a competition law investigation takes place. These might be management, sales forces, the legal department, compliance personnel, the head of electronic data processing and front-desk reception staff. “It was important to the client that our guides were translated into all local languages where K+S has operations,” explains Harald Kahlenberg, Head of the CMS Competition Law Group. “Most people prefer guidance in their native language, especially as they may use it in stressful situations. For example, in Germany, a competition investigation may involve the police, who often arrive armed.” Kahlenberg adds: “CMS’ ability to offer such extensive compliance training is helped by the fact that we have one of the largest competition law groups in the world – 140 specialists based in 29 European cities.” CMS in Mori Seiki hat-trick CMS has had a relationship with Japan-based engineering technology firm Mori Seiki for years. Work undertaken has included advising on a deal to increase Mori Seiki’s stake in Germany’s DMG (Gildemeister). Recently, CMS acted on another matter related to the two companies – the third such competition instruction since 2009. The latest instruction involved helping obtain cross-border competition law clearance of a Swiss joint venture between Mori Seiki and DMG. This alliance will take over the distribution and service activities of both companies in all European countries, except Germany. Meanwhile, DMG took over Mori Seiki’s equivalent operations in Germany. CMS helped Mori Seiki review its merger control filing requirements throughout Europe. This resulted in the need to make merger control filings in Austria, Germany, Italy and Poland. In addition, a filing was made to the Swiss Competition Commission. “The co-operation of competitors requires a cautious approach under competition law,” explains CMS’ Kahlenberg. “When advising Mori Seiki on this latest matter, it was helpful to draw on the same CMS competition law team that had advised the company the previous year. They already knew our client’s business, as well as its joint venture partner.” CMS aids 90% reduction in EU fine Breach of EU competition law can leave companies facing fines worth 10% of global turnover – enough to put even large firms under severe financial pressure. The consequences can be worse if the alleged
  13. 13. 11 competition What’s the most significant case you’ve ever handled? I advised on competition law issues relevant to a merger between two large pharmaceutical companies that had a very high combined market share across a number of markets. That kept me busy for about five months. What matter are you most proud of? As a young associate, I managed to have a cartel fine that had been imposed on a medium-sized construction company reduced from €500,000 to €30,000 in proceedings before the Dutch competition authority. Bankruptcy was avoided and many jobs were saved. If you could change one law, what would it be? I would change the rules requiring the notification of mergers to competition authorities in many member states of the European Union. These laws create a disproportionate burden for companies. Tell us something interesting about yourself Before I joined CMS, I worked as a référendaire – an assistant to a judge – at the Court of Justice of the European Union in Luxembourg for three years. It was a truly great experience to practise law at the heart of the European Union. Now, I am able to draw upon this experience, giving our clients better EU and competition law advice. 30 seconds with: Edm o n O ud e Elferink CMS in Brussels Das CMS-Team konnte eine Reduzierung der Geldbuße von Baerlocher um 90 Prozent erreichen “The CMS team secured a 90% reduction to Baerlocher’s fine” Office Head Michael Bauer, secured a 90% reduction in the fine to just €1 million. The Baerlocher case was a legal first for two reasons. First, the reduction was the first successful ‘inability-to-pay’ application under new fining guidelines issued by the European Commission. Second, the fine reduction was the largest ever obtained under the ‘inability-to-pay’ rules to date. The CMS team has since been asked by rival law firms how it achieved this outcome. One of Baerlocher’s competitors is challenging the decision at the EU General Court, saying Baerlocher’s fine reduction was unjustified. wrongdoing took place over a prolonged period and involved a firm’s main product. This was the case for global chemicals company Baerlocher, when it was investigated by the EU Commission for its role in a cartel in the plastic additives market. A threatened fine of more than €20 million was more than the company could afford. However, a CMS team, led by EU Law award wins Global Competition Review 100 2012 ‘A Guide to the World’s Leading Competition Law and Economics Practices’: CMS rated as leading competition law experts in Austria, Germany, Hungary, Italy, the Netherlands, Poland, Russia, Slovakia, Switzerland. Recently, Global Competition Review added CMS in France to its list.
  14. 14. European M&A activity in the retail sector remains buoyant. CMS’ Consumer Products Group acts for buyers and sellers alike CMS at Mid Europa’s convenience T he Central and Eastern European (CEE) retail sector has proved a fertile area for CMS recently. Just weeks after helping to conclude the Delhaize Group’s €932.5 million acquisition of Delta Maxi, CMS was appointed by long- standing client Mid Europa Partners to help with its bid to take control of Zabka Polska. Zabka is one of the largest chains of convenience stores in Poland, with 2,400 branches and sales of about €640 million in 2010. Mid Europa had Zabka in its sights for some time. The convenience chain had previously come onto the market in 2007, but Mid Europa lost out on that occasion to Penta Investments, a Central European investment group. When it became apparent later that Penta was putting Zabka up for sale, Mid Europa quickly called in CMS to help with its tender. However, as Warsaw-based CMS Corporate Partner Marek Sawicki explains, Mid Europa faced fierce competition in its renewed bid to win control of the retail chain. “The disposal was arranged as a beauty contest and we knew that several private equity houses were likely to be bidding against our client,” Sawicki says. “Once Penta decided that Mid Europa was its preferred bidder, it imposed a very tight timetable for negotiating the deal. A CMS team, including myself, Dariusz Greszta and Jakub Marcinkowski, started discussions one morning and the deal was signed the next day after just 24 hours of talks,” he adds. Sawicki maintains that he is confident that there is scope for more deals of this type in the CEE retail sector. “Our lawyers are aware of increased activity at the moment, both in terms of new deals being done and also those currently in the pipeline,” he concludes. 12 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 C onsumer products 12 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12
  15. 15. CMS advises on Saturn sale for Metro Group The Metro Group is one of the world’s largest retailers, with an annual turnover in excess of €66 billion. So, it was a great coup for CMS to be chosen to act for this important client when it decided to dispose of 34 of its Saturn stores in France, following a strategic review. The shops were purchased by international retailer the HTM Group, formerly known as Boulanger S.A. An 18-strong cross-border CMS team, including lawyers from Brussels, Cologne, Lyon and Paris, helped the Metro Group on the disposal, working to a tight two- month deadline. The transaction drew on a wide range of CMS’ legal specialties, including corporate and M&A, competition, employment, IP and IT, real estate and tax. As part of the deal, 2,000 Saturn employees, who generate sales of about €583 million annually, were transferred to HTM. After a short transition period, HTM intends to rebrand the Saturn stores with the Boulanger name. C onsumer products 13 events Breakfast briefing for consumer products clients This year, the Consumer Products Group in London is hosting a series of roundtable breakfast briefings and discussion forums across a range of topics affecting consumer products. These subject areas include health and nutrition claims in food and drink, category management, media marketing, corporate reorganisations, running competition law compliant promotions and advertising issues. The forums are designed to bring together in-house legal professionals for an in-depth discussion of the chosen legal topic. These events give the participants the opportunity to discover how key legal issues for consumer products companies relate specifically to their own business interests. Attendees have welcomed the opportunity to engage in exchanges with their peers about the similar challenges and experiences they face day-to-day. The forums allow CMS to understand better the commercial issues that most concern clients. The annual CMS Consumer Products Conference is on 25 October 2012. For information, email What’s the most significant case you’ve ever handled? A very important insurance matter that involved a railway accident. What matter are you most proud of? It was a complex product liability case where there was a claim against a manufacturer of electronic devices. The claimants were demanding compensation for damages following a fire that had destroyed an apartment. They claimed that one of the manufacturer’s products was to blame for the blaze. All circumstances were apparently in favour of the claimants, but a very long and complex investigation carried out by court-appointed experts and by the parties’ own experts revealed that the claim was groundless. If you could change one law, what would it be? I would change the Italian procedural system, which is incredibly complex and formal and would benefit from being simpler. 30 seconds with: Pa o la Ghez zi CMS in Rome I would change the Italian procedural system, which is complex and formal
  16. 16. A Christmas present for Kennametal It was one of the largest and most complex deals Kennametal Inc had ever undertaken, spanning eight jurisdictions. To complicate things further, the parties wanted to complete the transaction within three months. But neither challenge posed a problem for the 40-strong team of CMS lawyers advising Kennametal, a New York-listed metals company, on its bid to buy the Deloro Stellite Group, a specialist alloy solutions producer. “Shortly after negotiations began, we ran into the Thanksgiving celebrations in the US, followed by Christmas and New Year. There were, not surprisingly, deal-specific issues, too,” says London-based Corporate Partner Martin Mendelssohn, who led the deal. By the time the deal closed, CMS lawyers from eight countries, including China, France, Germany, Italy, Luxembourg, Russia and the UK, had helped Kennametal in its bid to buy Deloro. A range of legal specialisms had been deployed, including corporate, competition, pensions, employment, real estate and tax experts. The acquisition process revealed the conflicting mindsets of the European private equity seller and the New York-listed US trade buyer. “There were differing attitudes to matters, such as the repetition of warranties at closing and material adverse change provisions,” says Mendelssohn. “The ‘locked box’ concept – where the buyer takes the risk and benefit of the target business from an historic date without any purchase price adjustment – is not as widely used in the US as it is in Europe.” Although the date of the deal’s signing – Friday, 13 January 2012 – might have seemed inauspicious to some, Kennametal’s General Counsel Kevin G Nowe was delighted with the acquisition, which completed on 1 March 2012. Nowe paid tribute to the cross-border CMS team, thanking them for their “tireless effort” and their “most professional representation of Kennametal in this transaction”. He adds: “I don’t think CMS could have done any better.” France and Germany working in unison CMS teams from France and Germany joined forces to advise the EADS Group on a deal that established a new world leader in maritime security. Signalis, a joint venture company, was formed by the merger of Sofrelog and Atlas Maritime Security. Before the merger, Sofrelog was a subsidiary of Cassidian, formerly known as EADS Defence & Security. Atlas Maritime Security was a subsidiary of naval and marine electronics company Atlas Elektronik. The combined entity, whose services range from small-scale shipping monitoring systems to powerful coastal surveillance systems, currently operates in 50 countries worldwide. The full-service CMS team in Germany was led by Hamburg-based Corporate Partner Ludwig Linder and Tax Partner Heino Büsching. The CMS team in Paris included Tax Partner Edouard Milhac and Corporate Partner Jean-Robert Bousquet. Spanish client expands into Europe CMS in Spain led a €222 million deal in which office supplies business Unipapel SA acquired Spicers Group, the continental European business of DS Smith plc. CMS lawyers from seven countries advised on the transaction, representing longstanding client Unipapel. Now qualifying as Spain’s largest maker and distributor of paper products, the Unipapel Group is set to become the leader in the European office supplies industry as a result of the acquisition. The cross-border CMS team was led by Unipapel’s client relationship partner in Madrid, Corporate Partner Rafael Suárez de Lezo. CMS offices in Belgium, France, Germany, Italy, the Netherlands and the UK provided additional input. corporate 14 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 Cross-border deals are CMS’ lifeblood. Our M&A team had a busy year in 2011-2012 Collaboration is key in M&A CMS led a €222 million deal in which Unipapel acquired Spicers Group
  17. 17. corporate 15 corporate rankings 1st Europe Bloomberg, Thomson Reuters Buyout by volume, mergermarket Counsel to principals by volume, Bloomberg 1st Central and Eastern Europe Deals by deal count, Bloomberg 1st Germany Deals by deal count, Bloomberg, mergermarket, 2011 Thomson Reuters and Corpfin mid-market 30 seconds with: T ho mas M eyding CMS in Stuttgart PUBLICATIONSi The latest edition of CMS’ highly regarded analysis of M&A transactions in Europe has recently been published. The study is a detailed analysis of the European M&A deals that CMS acted on between 2007 and 2011 – more than 1,300 in number. CMS Head of Corporate Thomas Meyding says: “Clients continue to tell us how useful the study is, so we are pleased to publish its latest edition.” The fourth edition of the CMS European M&A Study What’s the most significant case you’ve ever handled? That is very hard to say, because every transaction is significant and unique due to the human dynamics. One of the most recent significant transactions was the sale of a 50% stake for €2.35 billion in Dekabank. I was representing eight different Landesbanken (regional state banks). What matter are you most proud of? I can say that so far no litigation has arisen out of M&A projects that I have been involved in – except for one that involved fraud on the other side. If you could change one law, what would it be? The Pareto principle. I would love to have 99% of the possible results with an investment of 20%. That would make life much easier and I could do so much more. Tell us something interesting about yourself At work I survive on apples, Gummibaerchen (jelly bears) and Diet Coke.
  18. 18. F or parties involved in complex cross-border disputes, international arbitration can sometimes be expensive and time- consuming, says Guy Pendell, Head of CMS’ Dispute Resolution Group. While some of this time and cost is inevitable, CMS has been exploring ways of improving the situation for clients. One solution is a new process known as WAVE – Work Allocation for Value and Efficiency. The principle behind WAVE is simple: minimise costs by using a cross-border team of lawyers in all suitable cases. This allows the client, after discussions with the lead Partner, to have items of work undertaken by appropriate lawyers in the most cost-effective location. For example, document reviews and initial witness interviews can often be undertaken locally, using lawyers who are not only experienced in international disputes, but also fluent in one or more of the languages relevant to the dispute. In some cases, this means witness interviews can be conducted in the native tongue of the individual concerned and then translated without the need for interpreters. Equally, conducting an initial document review in the native language can save significant translation costs. Our ability to offer this service is just one of the benefits of having a Dispute Resolution Group spanning 25 CMS offices, according to Pendell. To deliver cost savings while maintaining the highest level of service is essential and requires organisation and co-ordination. All the legal team needs to be familiar with the relevant procedures and, of course, they must understand the necessary issues in the case. Catching the WAVE of dispute success CMS achieves this through a combined approach of delivering effective training in cross-border disputes to its lawyers, covering the principles of effective case analysis, as well as offering advice on the interviewing and examination of witnesses. Lawyers are given advocacy training to ensure that they understand the different approach to hearings in different jurisdictions, ranging from international arbitration to common and civil law litigation. Once lawyers are fully trained, cases and individual work streams can then be planned and costed, using project management techniques more commonly found in large construction projects. Adopting the WAVE approach has proved popular with lawyers and clients. Recent WAVE-managed matters include cross-border teams in London and Moscow; Vienna and Bratislava; Bucharest and Sofia; as well as in many other locations. CMS lawyers are speeding up the resolution of cross-border disputes, improving efficiency and saving clients money 16 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 dispute resolution
  19. 19. CMS in Bucharest has successfully defended the Romanian State in a significant investment treaty arbitration before an International Centre for Settlement of Investment Disputes tribunal. The dispute centred on alleged violations of the Greece-Romania bilateral investment treaty and the European Convention on Human Rights. A Greek investor had complained that AVAS, the Romanian privatisation agency, had invoked a share pledge related to his frozen food warehouse business, which he acquired from the agency in the late 1990s. The investor said this was tantamount to expropriation and was unfair and inequitable treatment. The Romanian State, advised by CMS, argued that the investor had not complied with the share pledge’s conditions. The investor’s tax liabilities and his alleged failure to comply with EU food standards regulations were also brought into question. After a tribunal hearing in March 2011, the investor’s claim – $91 million in compensatory damages and $56 million in moral damages – was dismissed. AVAS’ attempts to enforce the share pledge were deemed ‘reasonable, appropriate and justified’. The tribunal ruled the State had not been excessive regarding the investor’s tax liabilities and food safety regulations. Bucharest-based International Dispute Resolution Partner Gabriel Sidere led the CMS team. He says: “This is the first hearing of its kind for CMS and is of great significance.” CMS wins for the Romanian State What’s the most significant case you’ve ever handled? One of my most significant cases involved working for a client on about 100 civil proceedings. This was further complicated by regulatory and criminal proceedings that were taking place at the time. Consistency was vital to ensure that any confusion was kept to a minimum. What matter are you most proud of? I think that I have reason to be proud of the two cases where I managed to convince the Supreme Court to change its jurisprudence. If you could change one law, what would it be? The law on the payment for copies from court files. At one euro per page, it is daylight robbery, especially in criminal cases when the copies are needed either to defend the client or to act for victims in preparing their damage claims. Tell us something interesting about yourself I love books. I can spend hours in bookstores and buy hundreds of books – then, inevitably, I struggle to find the time to read them. 30 seconds with: Dani ela K aro llus - Brun er CMS in Vienna Dadurch hat der Mandant die Möglichkeit, Leistungen jeweils auf dem kostengünstigsten Weg erbringen zu lassen “This allows the client to have items of work undertaken in the most cost-effective way” dispute resolution 17 client services Initial case assessment CMS can now offer a fixed-price initial case assessment in all disputes. The purpose of this initiative is to allow busy clients to use CMS as an extension of their own in-house legal team when resources are stretched. We can provide case assessments at an early stage to allow clients to make an informed choice about pursuing a potential claim. For clients, the process is very straightforward. After being given a brief outline of a dispute, plus essential documents, CMS assesses the merits of the case and carries out an initial cost-risk-benefits analysis. We can also provide strategic advice on how to resolve the dispute and, where it is appropriate, give a preliminary assessment of quantum. The law on payment for copies from court files is daylight robbery
  20. 20. employment & pensions 18 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 Cross-border people solutions CMS acts on major international restructuring Today’s economic climate means that many companies find they must restructure their operations. For businesses that work across national borders, this can be very complex. Inside the EU, many aspects of employment law are governed by Europe-wide directives and regulations. But, even within these cross-border frameworks, important national differences remain. In March 2011, a major consumer products business decided to undertake a global restructuring and collective redundancy programme. It wanted a particular type of European law firm – an adviser with a strong cross-border European presence. Just as importantly, the chosen lawyers would need to understand the finer points of employment law at a truly local level. Naturally, CMS fitted the bill. Not only do leading client guides, such as Chambers Europe, describe the Employment Group as being one of the largest in the European market, CMS is also ranked as a leading employment law adviser in many European countries. In addition, CMS has a strong track record of advising multinational clients on cross-border restructurings across a wide range of industry sectors. Nevertheless, this latest instruction was the most demanding cross-border matter CMS had handled. The advice covered a full analysis across 16 separate European jurisdictions of collective consultation obligations, the impact of works councils and protection against dismissal. The client also requested a detailed breakdown of the relevant processes and procedures they were required to undertake in each jurisdiction, as well as an indication of the potential costs and legal challenges. On top of this, all advice had to be provided within a very tight timetable – just 48 hours from start to finish. CMS delivered on all fronts, winning praise from the client. Speaking about the client’s feedback, CMS Employment Partner Anthony Fincham says: “The client commented very favourably on our ability to act within the brief, meeting the tight deadline and delivering the written advice within its budgetary constraints.” Advising across national borders The essential role of cross-border employment law expertise was highlighted when CMS advised Dutch energy company Delta NV on the sale of a subsidiary to a management buyout (MBO) team. The premises to be sold were unique, bridging the Netherlands-Germany border. CMS can help multinational companies restructure their operations, while complying with differing national employment laws “For businesses that work across national borders, restructuring can be complex” Our Employment Group is one of the largest in the European market Voor bedrijven met internationale business, kan een herstructurering complex zijn
  21. 21. employment & pensions 19 What’s the most significant case you have ever handled? In a current employment case, a former managing director tried to mislead his shareholders by establishing a competing group of companies. This breached all written agreements with the original company. The case has developed into a string of court cases, all of which have had a positive outcome for our client, the former employer. What matter are you most proud of? I am very proud of my Employment team in Amsterdam, as we have existed for several years now and it is a very dynamic group of lawyers. If you could change one law, what would it be? I would change the rule that only allows an employer in the Netherlands to give notice to a member of staff once they have obtained approval. I would also change the formula that calculates severance pay in the Netherlands. Currently, it results in amounts being paid to staff that are typically much higher than severance in other jurisdictions. If you weren’t a lawyer, what would you be? I would like to establish a foundation that would stimulate, motivate and develop children from poor backgrounds. 30 seconds with: K atja van K ran enburg CMS in Amsterdam My Employment team is a very dynamic group of lawyers CM S n e g o t i a t e d a n a c c e p t a b l e a g r e e m e n t Each half was run as a separate nation- based company, despite being located on the same site. When CMS advised on the employment aspects of the MBO, it had to devise a proposal that was legally robust in both countries. CMS’ Katja van Kranenburg led on the Dutch employment law aspects of the deal, working alongside her Hamburg-based colleague Bernd Roock. To complicate matters, there were multiple workers’ representative bodies to consult about the sale, two with overlapping coverage. At a national level, the local Dutch and German works councils agreed to share the consultation rights where legally allowed. An additional central works council also existed on the Dutch side, claiming exclusive rights to be consulted in that country. “Working in close co-operation with CMS in Germany, we presented our clients with scenarios that would hold up in court, if necessary,” says van Kranenburg. Because the venture’s financial future was uncertain, a key element was the establishment of a shareholder-funded severance package, payable to individual MBO employees in certain circumstances. A combined CMS team, involving both employment and insolvency specialists, helped negotiate an agreement that was acceptable to all stakeholders. “The severance package was an important safety net, required for the MBO to take place,” van Kranenburg says. Chambers Europe 2011: Employment & Pensions – France • Band 1: This highly esteemed French outfit (CMS) houses one of the leading employment departments in the country. The size of the team, coupled with the various specialisations of the lawyers, enables it to handle some of the most complex work in the area. A ke y e l e m e n t w a s t h e e s t a b l i s h m e n t o f a s h a r e h o l d e r- f u n d e d s e v e r a n c e p a c k a g e CMS International Guide to Pensions PUBLICATIONSi
  22. 22. Smart transmission networksInvestment in Europe’s energy infrastructure is essential. CMS supported the creation of an industry first in this area E lectricity transmission companies across Europe are upgrading their networks to cope with the growing expansion in renewable power generation. But many encounter the same problem. Most sources of renewable energy are in remote locations far from conventional power stations, so how can they be connected to their country’s major population centres? CMS has played its part in recent innovations. Rather than building a major new electricity transmission link over land, CMS advised on a pioneering initiative to develop a seabed- based alternative. CMS’ role in the deal was to advise NGET/SPT Upgrades Limited on procurement for a project called the Western High Voltage Direct Current (HVDC) Link. NGET/SPT Upgrades, the project sponsor, is a joint venture between two of the UK’s main electricity transmission companies – ScottishPower and National Grid. The tie-up between the two big names was established to deliver the €1 billion, 2.2GW project. It will be the longest 2.2GW HVDC cable in the world at 420km. CMS’ work on the deal was led from London, supported by CMS in Germany and Italy, and drew on a large range of expertise. Lawyers from the Energy, Projects, Construction and Planning teams were involved, while Corporate, Procurement, Banking, Environment, Health Safety and Oil Gas also played a part. The cable is expected to be fully operational in 2016. Robert Lane, the CMS Energy Head who led the project, says: “The Western HVDC Link project is a first. It is tremendous to be a part of this, addressing not only the UK’s energy needs, but also climate change. The project will also serve as the model for other sub-sea solutions and will be a helpful precedent for the ‘North Sea Grid’.” Reporta-se não só às necessidades de energia do Reina Unido, mas também às alterações climáticas energy 20 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 “It’s addressing not only the UK’s energy needs, but also climate change”
  23. 23. 30 seconds with: Mónica Carneiro Pacheco CMS in Lisbon Comment Helping market leaders enter new territories Penelope Warne, Energy Partner CMS has many years of experience helping its oil and gas clients enter new markets worldwide. Perhaps the most high-profile new market we have advised on recently is Iraq, where we helped BP and Eni, as well as a number of smaller companies, to get established. In Africa, we also acted for one of Europe’s leading energy companies on the development of the Reggane Nord gas field in the Algerian Sahara. Advice is tailored to the specific target country. In places such as Iraq, political sensitivities over ownership of oil and gas reserves mean that petroleum operations are governed by technical services contracts (TSCs) rather than licences, concessions or production sharing arrangements. Under a TSC, the oil companies provide the up-front capital to develop the infrastructure necessary for production and, if successful, can recover those costs with a fee. However, under a concession agreement, the ownership of energy assets may pass to the concession holder. Besides acting for major oil and gas companies on their international investments, CMS also acts for major services companies in this sector. Our Algerian team led by Samir Sayah regularly advises clients, such as Schlumberger, Baker Hughes and Halliburton. The diverse nature of our client matters show the real strength and depth of CMS’ oil and gas capabilities. That is one reason why guides to the world’s legal professions, such as Chambers and The Legal 500, consistently rate our lawyers’ reputation for oil and gas work, whether they are based in Algeria, Scotland, Poland or Portugal. What’s the most significant case you have ever handled? An agreement between a client and the Portuguese State that involved issues arising from a time when the State nationalised the company. What matter are you most proud of? Assisting a client on an important project in the renewables sector. If you could change one law, what would it be? I would reformulate the laws concerning Portugal’s renewables sector. If you weren’t a lawyer, what would you be? I would be a surgeon. energy 21 In late 2011, CMS advised asset management company LUXCARA GmbH on a deal to acquire and finance a substantial stake in Germany’s Briest solar park. The 91MWp, €200 million solar power station is one of Europe’s largest. The deal saw LUXCARA acquire two out of three of the park’s sub-sites, which it will manage on behalf of the FLAVEO SA, SICA-FIS fund. Acquisition finance was provided by HSH Nordbank AG and NORD/LB. A CMS team, led by Energy Partners Holger Kraft and Marc Riede, advised LUXCARA on all aspects of the deal’s acquisition and financing. Advice was also given in relation to the project’s legal restructuring, in particular its real estate agreements. Kraft comments: “This deal was complex for several reasons. The park’s original builder became insolvent shortly before financial close. Also, the investors’ assets were physically connected to those of another via shared infrastructure.” CMS in solar park success CMS in France has helped the French State on its first successful tender to develop large-scale offshore wind farms. When they come into service in 2015, the five new wind farms will each generate between 500MW and 750MW of electricity. A multidisciplinary CMS team helped the French ministries for the economy and energy draft the initial tender documents. In selecting CMS, the ministries singled out our EU-wide expertise in the offshore wind sector, as well as our strength in French banking, public and energy law. CMS’ advisory role involved ensuring that the tender documents were robust against potential legal challenges, for example, in relation to environmental law, while remaining financially viable. “Long-term investments are currently deemed very risky, because of frequent changes of law,” explains Paris-based Public Law and Energy Partner, Christophe Barthélemy, who led the team. Besides helping with the draft tender document, CMS also advised the ministries on which existing regulations should be changed – again to improve the project’s legal and financial viability. “We suggested several rules should be changed, including rules governing access to France’s high- voltage electricity grid,” Barthélemy adds. Assisting Barthélemy and Gérard Kling was structured finance lawyer Gregory Benteux and public law specialists Céline Cloché- Dubois and Aurore-Emmanuelle Rubio. Acting for the French State in wind farm first
  24. 24. Return to vendor Despite challenges in the world’s economies, there are still deals to be done in the hotels and leisure sector. CMS has an impressive array of clients in this market and advises banks and hotel chains C MS is known for having a substantial banking sector client base. We also have a Europe-wide reputation for representing clients in the hotels and leisure industry. So, when longstanding client The Royal Bank of Scotland Group (RBS) announced large-scale disposals in the hotels and leisure sectors, it turned to CMS. Like many recent sizeable disposals in this sector, the RBS deal was prompted by the credit crunch. All across Europe, banks have been divesting their non-core assets – even those performing well – in order to bolster their balance sheets. In one of RBS’ most significant disposals, CMS helped the 82% state-owned bank sell a 918-strong pub chain, known as the Galaxy Pub Estate. The deal was worth £422 million. One of the more unusual aspects of RBS’ Galaxy Pub Estate disposal, which completed in December 2011, was that it involved RBS selling the business to its original owners. RBS had originally acquired the pub estate – which largely consists of freehold properties – in 1999 from UK brewery chain Scottish Newcastle (SN). RBS had then contracted back the chain’s property management and beer supply to SN. However, in the intervening years, SN, in turn, had been acquired by the Amsterdam-based global brewing giant, Heineken. It was to Heineken that RBS sold its Galaxy Pub Estate business in this transaction. “The size and complexity of Galaxy’s portfolio made this deal a challenge to advise on. However, the fact that SN were already operating out of the premises that were to be disposed of undoubtedly helped the transaction to progress as smoothly as possible,” comments CMS Corporate Partner Louise Wallace, who led the deal. “This, together with the preparation undertaken prior to the sale, helped the whole transaction complete in just two weeks – which is a remarkably quick timeframe for a deal of its size.” 22 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 hotels leisure Award wins and deal recognitions • Hotels Leisure – Chambers UK, Band 1, London • Hotels Leisure – Legal 500 UK, Band 1
  25. 25. A significant trend in the hotel sector has been the sale and leaseback – or manage-back – of hotel chains’ property assets. This trend has persisted in 2011, as Accor continued with its €1.2 billion asset disposal programme. Last year, our French team advised the company on two Paris- based sale and manage-back transactions – one worth €105 million for the Pullman Bercy hotel and another worth €69 million for the hotel Sofitel Arc de Triomphe. Each deal was advised on by Paris-based CMS Corporate Partner Jean-Robert Bousquet, assisted by Jean-Cécile Sommelet and Jean-Charles Daguin. For hotel chains, there are advantages to this type of deal. In these latest transactions, the buyers paid Accor for the properties and business and Accor agreed to manage them on a long-term basis, ensuring steady cash flows for all parties. Accor also received a commitment from the hotels’ new owners that they would carry out substantial renovations at their own expense. From Accor’s point of view, it meant it could manage the “Distress-driven transactions have been a key feature of this year’s workload,” says CMS Hotels Leisure Head, Rome-based Marco Casasole. “CMS has acted in several deals of this type in the hotel and leisure sector during the past 12 months.” The pros and cons of hotel ownership – management splits The secret of distress success hotels in a less capital-intensive way. However, as another matter involving CMS in 2011 highlights, separating out hotel ownership and management does not always result in a happy working relationship between the two parties. During 2011, CMS was asked by InterContinental Hotels Group (IHG) to help it resolve a dispute with the then leaseholder of two of its German hotels, Neue Dorint GmbH. The relationship had broken down to such an extent that, in March 2011, IHG had pulled out of the two hotels managed by Neue Dorint in Berlin and Duesseldorf. A CMS team led by Corporate Partner Gerd Leutner was able to negotiate IHG’s return to the two hotels, by working with both properties’ owners – Union Investment Real Estate GmbH in Berlin and DKÖ Objektgesellschaft Königsallee Dr. Herbert Ebertz KG in Duesseldorf. Three months after CMS had resolved the issue, the IHG flag was once again flying over both hotels. Distress-driven transactions have been a key feature this year What matter are you most proud of? We got to know Invesco Real Estate through the work of several CMS offices for Accor across a number of jurisdictions. Although they were on the other side of the Accor deals at that time, Invesco subsequently chose CMS as its preferred legal adviser. Tell us something interesting about yourself For almost a year I was a second lieutenant in the Carabinieri, the Italian military police. Although the training at the military academy was a bit of a shock, I have to admit it was quite an experience – and I was fitter than I have ever been before or since. If you weren’t a lawyer, what would you be? My home town is less than 30 minutes’ drive from where Ferrari, Maserati and Lamborghini are created, so I’ve always been quite fond of motors. I think that I might have made a good car designer or mechanical engineer. This would, of course, depend on being able to grasp the maths required for the job. 30 seconds with: M arco Cas as o l e CMS in Rome One of the most significant matters of this type in 2011 involved CMS advising The Royal Bank of Scotland plc (RBS) on the sale of a 42-strong hotel portfolio that was operated by Marriott Hotels. Banking giant RBS had taken effective control of the hotel portfolio in June 2011 after its previous owners, a British Virgin Islands-based holding company, had gone into administrative receivership. A CMS team led by Hotels Leisure Partner Tom Page has now spent almost a year planning and implementing a sales process that will help the administrative receivers and RBS find a buyer for the Marriott hotel portfolio. An announcement on this is expected shortly. Invesco ha scelto CMS come consulente legale “Invesco chose CMS as its preferred legal adviser” hotels leisure 23
  26. 26. infrastructure project finance 24 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 Upgrading Europe’s infrastructure requires money, innovative thinking and technical expertise. The market for public-private partnerships (PPPs) and private finance initiatives (PFIs) remains dynamic. Our projects team works across this sector, advising financiers, project companies and government institutions CMS advised private sector financiers and the European Investment Bank (EIB) on a €410 million PPP project to widen the A8 motorway in Germany. This 58km scheme was named one of the EU’s key Trans-European Transport Network projects. Our team advised UniCredit and BBVA as arrangers to the deal. The project was granted up to €250 million of EIB funding to ensure its financial viability. The payment model used is unusual. The road is financed by tolls on heavy goods vehicles, making the project’s income stream unpredictable. Part of this risk was absorbed by the EIB, which granted what is known as an LGTT Guarantee Facility, in addition to its structured finance facility. In Germany, road tolls are collected by a body called Toll Collect, which passes the money to relevant local authorities. They pay toll receipts to the concession company, which funds road- widening work and pays for debt service. The deal was named the Deal of the Year 2011 award by Project Finance magazine. “This model is being rolled out to similar projects,” says CMS Partner Marc Riede, who led the finance team. On the fast track to toll road success Thanks to a deal advised on by CMS, the North Sea is proving to be an important source of renewable energy in the form of wind-generated electricity. In 2011, CMS helped a consortium of investors to build an offshore wind farm 180km north-west of the German coastal town of Bremerhaven. The €1.7 billion 400MW scheme is due to go live in 2013 and will be capable of powering 445,000 homes. CMS advised the consortium company Global Tech I on all aspects of the project, including its financing, the contracts for the supply and installation of the 80 wind turbines, the construction of an offshore transformer station, as well as the associated service and maintenance agreement. As one of the first commercial offshore windfarms in the German North Sea to have secured bank financing, this project will prove to be a benchmark transaction for future financing in this field. It also won the PFI Wind Deal of the Year award for 2011 from the trade journal Project Finance International. The CMS team that worked with Global Tech I included advisers specialising in banking and finance, led by Marc Riede, as well as those specialising in projects and public law, headed by Holger Kraft. Another first in offshore wind D e a l o f t h e Ye a r 2 011 CM S a d v i s e d o n a € 410 m i l l i o n d e a l t o w i d e n t h e A 8 m o t o r w a y i n G e r m a n y
  27. 27. infrastructure project finance 25 Further co-operation between the TMT and the IPF sector groups has led to CMS’ first instruction on a satellite PPP. Joanne Wheeler, Jonathan Dames and Paul Smith are leading a London-based team advising Com Dev, the manufacturer of space hardware, on a PPP study with the European Space Agency to develop further a satellite-based Automatic Identification System. This new system is for the long-range tracking of shipping, using existing on-board collision avoidance and navigational aid systems. CMS has also hosted a full-day conference attended by British government ministers and key players from the satellite industry and the City of London. The discussion throughout the day was around easing the terms of financing for satellite transactions. The keynote speaker, Lord Green, the UK Minister of State for Trade and Investment, spoke of the necessity for clear government support and the need to get hi-tech developments to the market earlier, which was widely reported by the media. Meanwhile, John Snowdon of Britain’s export credit agency, UK Export Finance (UKEF), told the industry participants and funders that UKEF was ready, willing and able to provide credit support to satellite financing transactions. As PFI and PPP projects become common across Europe, there is an increasing trend to restructure and refinance portfolios. Over the past 12 months, CMS has been active in this market, acting on numerous transactions by investment funds acquiring stakes in existing PFI/ PPP projects, as well as for the banks providing finance to those funds. In a single transaction, worth about £1 billion, we helped refinance a substantial projects portfolio, which included a large number of PFI/PPP projects. PPPs in space Acquiring and financing PFI/PPP portfolios “Because these transactions are relatively complex, it is not unusual for deals of this type to take several months to negotiate,” says Infrastructure Project Finance Partner Andrew Ivison. “The challenge for the year ahead is identifying the sources of funding, not only for MA activity in the projects and infrastructure sector, but also for ‘greenfield transactions’, too, as banks continue to retrench or exit the market completely.” T h e t r e n d i s t o r e s t r u c t u r e a n d r e f i n a n c e t h o s e P F I a n d P P P p r o j e c t s t h a t a r e m o r e m a t u r e O n e t r a n s a c t i o n w a s w o r t h £1 b i l l i o n T h e 4 0 0 M W s c h e m e s h o u l d p o w e r 4 4 5 , 0 0 0 h o m e s b y 2 013 CM S h o s t e d a c o n f e r e n c e w i t h g o v e r n m e n t m i n i s t e r s a n d i n d u s t r y p l a y e r s CM S h a s b e e n a c t i v e i n t h i s m a r k e t
  28. 28. “Our track record in longevity risk transfer, together with the expertise of our Derivatives, Pensions and Regulatory teams, means we are ideally placed to help clients in this fast-growing market,” adds James Parker, the Partner who led the CMS team on the Rolls-Royce deal. Helping JLT to reshape its European network CMS’ cross-border capabilities were highlighted when we advised longstanding client Jardine Lloyd Thompson (JLT) on a deal to reshape its European operations in 2011. JLT, Europe’s leading independent insurance broker, instructed CMS on a deal to spin off its Italian business into a joint venture with Marine Aviation SpA. JLT retained a 25% stake in the new venture. CMS’ insurance expertise has helped clients expand internationally, reshape existing operations and handle the challenges and insurance risks of an ageing population Managing pensions and longevity risk Over the past year, CMS lawyers have played a key role in helping insurers, reinsurers and other financial institutions working in the rapidly evolving pensions and longevity de-risking market. CMS teams have acted on three of the four largest longevity deals in the UK market in 2011. We advised a major European reinsurer backing a £1.7 billion longevity swap between Credit Suisse and the pension scheme for broadcaster ITV. Later in the year, CMS lawyers from London and Paris helped international reinsurer SCOR Global Life SE in its reinsurance of a £3 billion longevity transaction between Deutsche Bank and the Rolls-Royce UK pension scheme. In mainland Europe, the team was involved in the syndication of the €12 billion longevity swap between Dutch insurer Aegon and Deutsche Bank. “With Solvency II on the radar for occupational pension schemes across Europe, ever stronger demand for longevity de-risking solutions looks inevitable,” says Mike Munro, a Partner in CMS’ Financial Services and Products team who was involved in the ITV and Aegon deals. 26 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 insurance With Solvency II on the radar, stronger demand for longevity de-risking solutions is inevitable Covering the globe
  29. 29. The Italian deal was the second cross-border transaction on which CMS had advised the broking giant in the previous 12 months. In 2010, CMS in London and Vienna helped JLT on its collaboration to invest in the GrECo Group, a Vienna-based pan-Central and Eastern Europe (CEE) insurance broker. The CMS team advising on JLT’s Italian disposal and joint venture was led by Rome-based Corporate Partner Marco Casasole. The deal, along with its CEE predecessor, was run in conjunction with CMS in the UK. UK Partners Ed Foss and John Cadman also advised. Litigating over the fallout of the Fortis collapse It was one of the largest casualties of the credit crunch – the failure of Fortis, previously one of the world’s largest companies. The Benelux- based insurance, banking and investment management firm had to be rescued by the Belgian, Dutch and Luxembourg governments in 2008, following its ill-fated attempt to jointly acquire ABN AMRO in unison with The Royal Bank of Scotland and Banco Santander. Now, CMS is acting on behalf of QBE, the global directors’ and officers’ insurance provider, in the claims-handling process against Fortis and its former management. According to Leonard Böhmer, the Utrecht-based Insurance Partner who is leading the CMS team acting for QBE, the focus is now on the fallout from the recent decision reached by the enterprise chamber of the Dutch Court of Appeal. The Court concluded that Fortis’ former directors and managers had “mismanaged the company” and “misrepresented the financial position of Fortis at the time of the public offering of shares to fund the takeover of ABN AMRO”. “The decision of the enterprise chamber is the first landmark of the dispute on the issues of directors’ and officers’ liability,” Böhmer explains. “All cases of this type start and effectively end in this court. The decision will serve as a guide for future court decisions on the liability of both Fortis and the individual directors and officers.” CMS at the forefront of insurance market consolidation The insurance sector is one that has long been ripe for consolidation and CMS has been instrumental in recent moves by several established insurers to increase their global reach. In the past 12 months, lawyers from across CMS have helped two major insurance companies get established in Europe – one from Japan and another from New Zealand. A cross-border team advised new client Mitsui Sumitomo, the seventh largest non-life insurer in the world, on its entry into Germany, as a prelude to a wider European expansion. Leading the CMS team was Cologne-based Insurance Regulatory Partner, Winfried Schnepp, supported by a team in London and Paris that included Partners Paul Edmondson, Chris Southorn and Laurent Mion. CMS advised on the acquisition by CBL Insurance Limited, New Zealand’s largest credit and financial surety insurer, of European Insurance Services Limited, an underwriting agency operating in the UK, France and Spain. CMS in London and Paris advised on the deal, which absorbed European Insurance Services’ offices in Tunbridge Wells (UK), Paris and Madrid into CBL Insurance’s growing empire. In both transactions, regulatory approval was crucial and an important area on which CMS advised. Whether acquiring existing insurance companies or establishing in greenfield locations, Europe’s insurance regulators want assurances that the target companies’ new owners are acceptable and have adequate capital resources available. “European insurance regulators are not just looking for reassurance that new market entrants meet existing capital requirements, but also those required under the new Solvency II Directive,” explains CMS’ Schnepp who acted on the Mitsui Sumitomo deal. CMS è stato fondamentale nelle scelte compiute da società assicurative affermate per accrescere la loro presenza sul mercato “CMS has been instrumental in moves by established insurers to increase their global reach” 27 insurance £3billion The value of the longevity transaction between Deutsche Bank and Rolls-Royce, advised upon by CMS
  30. 30. intellectual property Consistently inconsistent CMS in London. “Ideally, if a patent holder wins a patent battle in one country, that ruling would automatically be enforceable in every European country where the patent infringement had occurred. Unfortunately, that cannot happen under the existing regime, except on an interim basis. This is because each ‘European’ patent is actually regarded as ‘national’ and each country’s courts can only rule on the legality of that patent in their own state.” Beckett adds: “It would be helpful if a court in a single European country was allowed to hear and rule on whether a patent had been infringed irrespective of where in Europe the alleged infringement had occurred. But, again, this cannot currently happen. This is because Europe’s patent laws, while they are all based on the same general principles, also have subtle differences that a single ruling might not be able to reconcile.” The CMS team insists that the creation of a unified patent regime would make many of these legal and logistical problems disappear. The group acknowledges the effort being made at a European level to bring about harmonisation. “There are now proposals to standardise what can and cannot be patented across Europe,” says IP specialist Matthias Eck from CMS in Stuttgart. “If this reform were implemented, it would I t is a question that is often on our clients’ minds, especially those in the technology and pharmaceuticals sectors. When will Europe end its internal squabbling and create a unified EU patent?” explains Markus Deck, a CMS Intellectual Property (IP) Partner from Duesseldorf. “The topic also cropped up on a recent CMS visit to our clients in Asia. They could not believe how complex the European patent system is.” The frustration felt by our clients in Asia about the European patent regime is not unique – clients in Europe also say the current system is difficult to navigate. It has been possible to submit a single application to register a patent simultaneously in several EU states for some years. However, the downside of this system is that it creates a series of national patents, each governed by the respective nation’s laws. Despite decades of legal and political wrangling, there is no single, overarching European patent. In addition, no one European court has the power to make a definitive pan-European ruling about a patent’s legality. The members of the CMS patent litigation team who deal with this reality on a daily basis say the lack of a unified system in Europe is not just a problem when initially registering patents. It creates difficulty for European patent holders trying to enforce their rights on a continent-wide CMS helps clients navigate Europe’s patent laws and protects their interests when involved in cross-border disputes basis. As high-profile spats between smartphone and tablet manufactures have illustrated, cross- border patent recognition and enforcement is of central importance to many companies’ existence, regardless of their business sector. “In order to enforce their rights across Europe, a patent holder must bring separate claims in each EU state where they believe a patent infringement is occurring, which can be very time-consuming and expensive,” says Nick Beckett, IP Partner for 28 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 intellectual property “Clients cannot believe how complex the European patent system is” Mandanten staunen über die Komplexität des europäischen Patentsystems
  31. 31. remove the risk that courts in different EU countries would come to different decisions about whether a patent that has been granted under the current system is valid under their national law.” Until a single European patent system is in place, companies have no option but to endure the national differences that render cross-border enforcement difficult, says London-based IP Partner Jeremy Morton. “However, one of the advantages of having 150 IP lawyers across Europe is that CMS understands these national differences and can advise our clients how best to work within them.” Jean-Guillaume Monin from CMS in Lyon adds: “Experience tells us that it can take more than 20 months for the Patent Court in Paris to rule on a patent dispute and about 17 months in the UK. However, patentees have a higher success rate when enforcing their rights in France compared with the UK – about 35% versus 10%. In France, the patentee success rate is even better if we only take into consideration infringement proceedings based on a European patent.” “By having access to this kind of market intelligence, our patent litigation team can advise clients involved in cross-border patent disputes when – and in which country – it is advisable to start their claim,” Monin concludes. What’s the most significant case you have ever handled? We represent a satellite operator being sued by the copyright owners of television programmes viewed using a satellite dish and a decoder. Our client does not want to pay royalties, because the broadcasting organisations have already paid them. The broadcasting organisations no longer broadcast the content themselves, but they still pay for the act of broadcasting. Satellite operators or cable operators should not pay what the broadcasters have already paid. After referral to the Court of Justice of the EU, the case is pending before the Brussels Court of Appeal. What matter are you most proud of? We won a case for the ‘.eu’ domain registry against a Chinese individual who registered 10,000 domain names in bad faith. Rather than forcing the organisations or individuals to claim the transfer of their domain name or leave their rights infringed, one court order demanded the release of the domain names. If you could change one law, what would it be? I would change the Belgian Distribution Act of 1961. It provides too much protection for a distributor whose distribution agreement is terminated. The Act lets a court decide how much compensation is due to the distributor on an agreement’s termination. It would be better if a distributor were entitled to compensation for a percentage of this personal turnover for every five years the distribution agreement has lasted. 30 seconds with: To m H eremans CMS in Brussels I would change the Belgian Distribution Act of 1961 29 intellectual property commenT Tax: another important factor in the patent equation Diogo Duarte de Oliveira, CMS in Luxembourg It is not only patent laws that vary across Europe. The treatment of patents from a tax perspective also differs between countries. To counter this lack of harmony at a European level, one idea gaining traction across the continent is the concept of the ‘patent box’. A patent box is a preferential tax regime for patent profits. Such schemes are intended to boost research and development, while incentivising companies to retain ownership of the patents they create. The UK is the latest EU state planning to introduce such a scheme, following Ireland, Luxembourg and Switzerland. As a country with a patent box regime since 2008, Luxembourg’s experience in this field suggests that this tax incentive works. It may be because the scheme is generous. In total, 80% of royalties, damages and capital gains realised on certain intellectual property (IP) rights are exempt, creating an effective tax rate of about 5%. Unlike the proposed UK scheme, the Luxembourg tax break offers reliefs on other IP rights besides patents, such as software copyrights. We believe that this could make Luxembourg an attractive location for international lifesciences companies to base their operations in the longer term.
  32. 32. lifesciences 30 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 T akeda Pharmaceutical Company Limited has a strong and longstanding relationship with CMS. Even so, the work recently undertaken by CMS for the Japan-based business was remarkable for its sheer scale and reach. CMS advised Takeda on its acquisition of Swiss- headquartered Nycomed A/S last year in one of the largest global lifesciences transactions of 2011. The deal was worth €9.6 billion and 70 jurisdictions were involved. Recognition of the achievement soon followed. The transaction was named private equity deal of the year by the Financial Times and mergermarket. CMS’ role was highly commended at the 2012 Legal Business Awards. CMS has subsequently been retained to act on the integration of Takeda and Nycomed. “Being asked to handle Takeda’s post-integration issues was a true seal of client satisfaction,” says Sandra Rafferty, the Corporate Partner who led the initial deal. “It made sense. We had learnt a lot about Nycomed through the due diligence process that would be of relevance for integration and Takeda was familiar with our team and working practices. Of course, we were familiar with them.” CMS’ wide geographical footprint, industry sector expertise and cross-border integration have been instrumental in securing the firm’s role in advising Takeda. “We have a genuinely multidisciplinary team advising Takeda, including lawyers from numerous CMS offices,” adds Rafferty. Patrick Sommer from CMS’ Zurich office is one member of the team working on the integration process, along with Pietro Cavasola from CMS in Italy and Ralf Kurney of CMS in Germany. Logistically, it also helped that CMS has a large presence in Zurich, where Nycomed has its main operation. CMS’ specific expertise in pharmaceuticals regulation has also proved key, especially during the integration phase. CMS’ ongoing role advising on the integration of Takeda and Nycomed requires legal skills that complement those in evidence during the main acquisition. During this process, CMS won praise from Takeda for its ability to negotiate effectively with the sellers, even within tight constraints. By contrast, the integration process is much more lengthy and will ensure that CMS further deepens its relationship with Takeda during 2012 and beyond. CMS played a key role in one of the biggest global lifesciences MA deals of 2011. Its work to integrate the two companies continues A winning combination Takeda/Nycomed was named private equity deal of the year commenT What is driving major deals in the pharma sector? David Butts, CMS in Sofia
  33. 33. lifesciences 31 What’s the most significant case you have ever handled? A price-fixing investigation – our client Bayer Switzerland is being investigated by the Swiss Competition Commission. An important case. What matter are you most proud of? Being part of the CMS team working on Takeda’s acquistion of Nycomed A/S. We showed we were the right choice to handle such a complex, multi-jurisdictional matter. If you could change one law, what would it be? Patent laws in Europe make life difficult for innovative companies, especially lifesciences clients. The process must be simplified. Tell us something interesting about yourself I was the General Counsel at Holcim, a global company based in Switzerland. It made me see how lawyers can make clients’ lives easier. 30 seconds with: Patrick S o mm er CMS in Zurich Lifesciences remains one of the prime industries for global MA activity, with Takeda’s acquisition of Nycomed being just one example of a spate of deals in this sector. Several factors are driving this trend. Established pharmaceutical companies are focusing their MA activity on emerging markets, where their portfolios may be too weak to take advantage of anticipated growth – principally in the BRIC countries and Turkey, but also in the rest of Asia and south-east Europe. Several companies also face a ‘patent cliff,’ with their patents on major ‘blockbuster’ drugs about to expire. Moreover, low RD productivity has resulted in diminished pipelines of new drugs in development, driving large companies to acquire promising small or start-up competitors to maintain or enhance their portfolios. Finally, a desire to diversify established product lines may also drive MA. The growing role of private equity investment as a driver of deal activity in the pharmaceutical sector is worth noting. In Europe, total private equity investment increased from €3.4 billion in 2009 to €5.7 billion in 2010, says the European Private Equity and Venture Capital Association. On the disposals side, private equity houses play a crucial role in MA. Before being acquired by Takeda, Nycomed was owned by a consortium of private equity houses, including Nordic Capital and Credit Suisse. Since CMS is a leading adviser in Europe in the pharmaceuticals market, such trends vindicate our creation of a 50-strong dedicated Lifesciences team, working across national borders and legal specialisms. The team works closely with lawyers from other CMS disciplines, such as private equity and consumer products, offering a ‘one-stop shop’. Whether advising companies on the acquisition of start-ups or multinational competitors, our experience illustrates our understanding of this sector and how we help clients meet strategic objectives.
  34. 34. I nvolvement in one of the largest private equity deals in Central and Eastern Europe (CEE) is bound to present logistical challenges. When acting for a potential purchaser in a competitive bid situation, things are rarely straightforward. But, CMS could never have anticipated the last- minute hurdle it encountered when acting for Advent International on its 2011 bid to buy Provimi Pet Food from the Provimi Group. Provimi Pet Food is the third largest producer of private label wet and dry pet food in Europe. The deal had an enterprise value of €188 million. CMS had been working for Advent for almost seven months, advising on acquisition and financing. There were few problems beyond co-ordinating a 130-strong legal team across nine CMS offices. Then, an unexpected corporate reshuffle at Provimi Group meant a key document had to be stamped by a Russian notary for the sale to proceed. It became clear that, with fewer than 24 hours to go before the deal deadline, the notary lined up by the sellers could no longer carry out his duties. No notaries were available due to a day-long Russian notaries’ annual convention. ”Thanks to the efforts of the Moscow office, especially Partners Maxim Boulba and David Cranfield, we fixed the problem,” says International Private Equity Partner Graham Conlon, who led the deal. ”In 24 hours, we managed to persuade a notary to leave the convention to stamp the document to meet the noon deadline in London. It was very close – the document was stamped with less than a minute to spare. Our lawyers had spent the morning rushing around Moscow, getting paperwork in place.” A key ingredient was the deal’s ability to attract funding. Prague-based Partner Ana Radnev led this part of the deal, helping Advent negotiate with the banks that helped finance the transaction. “This was a great example of CMS’ banking and corporate lawyers working together,” she says. Chris Mruck, Advent’s Managing Partner, has praised CMS for its cross-border expertise. He says: ”This was a complex multi-country acquisition and I was pleased with CMS’ ability to provide a seamless one-stop-shop service across jurisdictions and practice areas.‘ CMS’ local market knowledge helps clients advising private equity investors in semi-mature markets. Conlon adds: ”Our lawyers understand local practices and give our clients commercially pragmatic advice, while safeguarding interests.” T h e d o c u m e n t w a s s t a m p e d w i t h l e s s t h a n a m i n u t e t o s p a r e b e f o r e t h e n o o n d e a d l i n e Czech Republic, France, Hungary, the Netherlands, Poland, Russia, Slovakia other offices involved in this deal CMS’ speed, efficiency and local know-how was put to the test in a recent deal to buy a pet food firm Tracking down local expertise 32 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 private e q uity
  35. 35. private e q uity 33 The European Union’s (EU’s) Alternative Investment Fund Managers Directive (AIFMD) comes into force at national level in 2013. Those affected should be preparing now. EU managers affected by AIFMD can apply to their national regulator to be authorised from July 2013 and must obtain authorisation before July 2014. Authorisation is compulsory if EU-based managers are involved in promoting or operating an Alternative Investment Fund (AIF) – typically, those holding private equity, hedge and real estate underlying investments. Authorisation is conditional upon factors such as capital requirements, compliance with AIFMD’s operational requirements and engagement of a depositary for each AIF. Custodian banks are expected to operate as depositaries, but the depositary must be independent of the Alternative Investment Fund Manager (AIFM) of the AIF. Non-EU managers can continue to market AIFs in the EU under existing private placement rules, subject to certain requirements. Managers outside the EU should also be able to use a passporting regime from 2015. The EU may abolish private placements in 2018. Despite the compliance burden, from 2013, EU-based AIFMs will be entitled to manage funds throughout the EU without complying with different nationality requirements. They will be entitled to passport the marketing of EU funds to professional investors in the EU and may be allowed to market the AIFs to retail investors under national law. The equivalent benefit should apply to non-EU managers marketing to EU investors under the third-country passporting regime scheduled for 2015. AIFMs should exploit opportunities, but address investors’ concern that erosion of investment returns due to compliance with AIFMD is kept to a minimum. The buyer and the seller refused to talk to or see each other commenT Authorised to invest Melville Rodrigues, CMS in London What’s the most significant case you have ever handled? A complex private equity deal that involved a privatisation, a refinancing of 40 leisure resorts, a management package that involved 100 managers, as well as an antitrust clearance in many countries across Europe. What matter are you most proud of? Having closed a deal after nine months of negotiation, during which the buyer and the seller refused to talk to or see each other. It didn’t help that both individuals were equal partners in the target company. If you could change one law, what would it be? I would change the French Civil Code to secure the enforceability of put and call options. 30 seconds with: Chris to phe Bl o nd eau CMS in Paris €188 million The enterprise value of the Provimi Pet Food deal
  36. 36. real estate construction 34 C M S A N N U A L R E V I E W 2 0 11 – 2 0 12 T he push to cut Europe’s carbon emissions is putting pressure on the real estate sector to improve new buildings’ energy efficiency. But, as CMS recently discovered, the use of ‘green clauses’ is growing, despite a patchwork of regulations and market practices across the continent. This is because their use is key to safeguard the value of real estate investments in the long term. Recently, CMS has taken steps to help property owners, users, investors and asset managers by producing a new e-guide, the CMS Study on the Use of Green Lease Clauses in Europe. Combining market intelligence from 21 countries, the study is a useful tool for comparing regulations and practices in different states. The guide includes recommendations on drafting green leases. Explaining the thinking behind the guide, Stuttgart-based Real Estate Partner Dirk Rodewoldt says: “With so much focus on green buildings, we wanted to find out what was being done across Europe, identifying best practice.” His Amsterdam-based colleague Arnout Scholten adds: “Environmentally friendly and sustainable buildings are starting to become the norm across Europe, as the continent aims to meet its Kyoto Protocol targets. So, ensuring buildings stay green during their entire lifetime is essential to future-proof investments.” When making purchasing decisions, property investors can now rely on energy certificates, an important new requirement in this area. However, as CMS found when researching the guide, not all Europe’s energy certificates are directly comparable. “This can be confusing both to investors and users alike,” says Brussels-based CMS Partner Bruno Duquesne. He believes that, in future, certification standards should be harmonised across the continent for both new and existing properties. “This development would be beneficial to the real estate industry across Europe,” Duquesne concludes. The CMS e-guide: Study on the use of Green Lease Clauses in Europe can be downloaded at We wilden nagaan wat er gedaan werd in Europa, om best practices te identificeren “We wanted to find out what was being done across Europe, identifying best practice” CMS’ real estate expertise is guiding clients through environmental legislation, letting them make informed purchasing decisions – and has helped Poland’s football squad Navigating the green lease minefield