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Veirano Advogados
May, 2010 - San Paulo, Brazil
Deals and Transactions
DEALS AND TRANSACTIONS
Summary of Transaction
Norwegian aluminum producer Norsk Hydro ASA acquired the aluminum business of Brazilian mining giant Vale for $4.9 billion, in a very complex M&A transaction. The targets include a producing bauxite mining site, over one hundred mineral rights, a 244 Kms slurry pipeline, the world’s largest alumina refinery, the forthcoming alumina refinery of Companhia de Alumina do Pará and Albrás’ well-known aluminum refinery.
Upon completion of the transaction, Norsk Hydro will be the owner and controller of the following assets and companies: (i) Paragominas, one of the largest bauxite mines in the world; (ii) 91% equity in the world's largest alumina refinery, Alunorte; (iii) 51% equity in the Albras aluminum plant; and (iv) 81% percent equity in the CAP alumina refinery project.
In exchange for the transaction, Vale shall receive US$ 1,1 Billion in cash, in addition to shares which will ensure a 22% stake in Norsk Hydro’s capital stock, becoming the second largest shareholder of such company after the Norwegian government. Norsk Hydro shall also assume a US$ 700 Million debt of Vale’s aluminum business.
The Norwegian government, controlling shareholder of Norsk Hydro, will take part in the rights issue to maintain its stake. When Vale receives its 22% stake, the state's shareholding will drop to 34.5% from the current 43.8% equity.
From a legal perspective, the transaction required significant corporate, contractual, tax, regulatory and environmental works by the parties’ in-house teams and international and local advisors.
Comments
Pedro Garcia from Veirano says: “This has been one of the most challenging M&A transactions in which our infrastructure and natural resources group has ever been involved. Given the complex operations of the targets, we had to address all possible legal aspects from usual corporate, tax and contractual issues to environmental and regulatory aspects relating to mining, energy supply, transport and ports.”
“The tax aspects of cross border M&A transactions of this size and scope are by nature complex and we are very proud of being a part of this successful deal”, says Márcio Neves, tax partner from Veirano Advogados.
Value of deal (if relevant)
US$ 4.9 Billion
Date of closing
Signing on April 2, 2010
All firms Involved
Counsel to Norsk Hydro:
Latham & Watkins (London) and Veirano Advogados (Rio de Janeiro).
Counsel to Vale:
Allen & Overy (London).
Lawyers acting in transaction (please stipulate if partner or associate)
From Latham & Watkins –
Leading Partner: Glen Ireland
Senior Associate: Robbie McLaren
Senior Associate: Graham Sammuel Gibbon
Associate: Ivan Rabanillo
Associate: Saad Mian
Associate: Hannah Strong
From Veirano Advogados –
Leading Partner: Carlos Americo Ferraz e Castro
Tax Partner: Marcio Calvet Neves
Senior Associate: Pedro Garcia
Senior Associate: Kárim Ozon
Senior Associate: Juliana Gueiros
Associate: Alan Parker
From Allen & Overy (London) -
Leading Partner: Jeremy Parr
Senior Associate: Lisa O’Neill
Senior Associate: Elisabeth Moseley
Associate: Gareth Irving
In-house lawyers
In-house lawyers from Norsk Hydro:
Tim McCleary
Einar Riddervold
In house lawyers from Vale:
Rogerio Teixeira dos Santos
Marcelo Quintella
Email addresses of all lawyers involved (from all sides)
glen.ireland@lw.com
robbie.mcLaren@lw.com
Graham.Samuel-Gibbon@lw.com
Ivan.Rabanillo@lw.com
Saad.Mian@lw.com
Hannah.Strong@lw.com
carlos.castro@veirano.com.br
pedro.garcia@veirano.com.br
alan.parker@veirano.com.br
marcio.neves@veirano.com.br
juliana.gueiros@veirano.com.br
karim.ozon@veirano.com.br
Jeremy.Parr@AllenOvery.com
Lisa.O'Neill@AllenOvery.com
Elisabeth.Moseley@AllenOvery.com
Gareth.Irving@AllenOvery.com
tim.mccleary@hydro.com
einar.riddervold@hydro.com
rogerio.teixeira.santos@vale.com
marcello.quintella@vale.com
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