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Wachtell, Shearman head up $50bn Merrill sale

Author: Sofia Lind

Published: 15/09/2008 15:32

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Elite US firms Wachtell Lipton Rosen & Katz and Shearman & Sterling have taken the lead advisory roles on the $50bn (£28bn) all-stock sale of banking giant Merrill Lynch to Bank of America.

Bank of America was advised by a 23-strong Wachtell team comprising 12 partners, including Edward Herlihy, co-chairman of the firm’s executive committee, who also last week advised the US Treasury Department on its bailout of mortgage giants Freddie Mac and Fannie Mae.

The Wachtell team included lawyers from the corporate, antitrust, executive compensation and benefits, restructuring and finance and tax departments.

Shearman & Sterling advised Merrill Lynch on the deal, which is expected to be completed in the first quarter of 2009.

The Shearman team was led by New York-based M&A partners John Madden, John Marzulli and Scott Petepiece, with support from executive compensation and employee benefits partners Linda Rappaport and Jeff Crandall, tax partners Doug McFadyen and Peter Blessing and finance partner Maura O'Sullivan.

Madden told Legal Week sister title The Am Law Daily: "This was so fast-paced that it all had to be done on-site, not over the phone."

Madden described the deal as "extremely attractive" for Merrill share-holders; it represents a 70% premium on Merrill's Friday closing price, according to Bloomberg.

Cravath Swaine & Moore acted as counsel to the independent directors of Merrill Lynch. The Cravath team includes New York-based litigation partner Robert Joffe and corporate partners Susan Webster and Sarkis Jebejian.

Under the terms of the transaction, Bank of America will exchange 0.8595 shares of Bank of America common stock for each Merrill Lynch common share. The three directors of Merrill Lynch will join the Bank of America board of directors.

The takeover increases Bank of America’s total number of financial advisors from 4,000 to 20,000, giving it the largest amount of brokers of any bank in the world.

The news comes as US investment bank Lehman Brothers files for bankruptcy protection in a dramatic weekend for the global financial markets.

Last week Wachtell took a lead role on the US Government’s rescue of failing mortgage giants Freddie Mac and Fannie Mae.

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