Best legal team in an M&A transaction: Kraft Foods
Jerry O' Leary from UPRR (center) with, from left to right: Irma Villarreal, Phoung Lam, Lisa Schroeder and Carol Schonert from Kraft
As the old adage goes, there is no ‘I’ in team. There is also no ‘I’ in Kraft Foods, the recipient of the award for best legal team in an M&A transaction at the Corporate Governance Awards 2010.
Kraft’s legal team spearheaded an unprecedented deal in which the company acquired the world’s second-largest confectioner, Cadbury. The team consisted of Marc Firestone, Gerd Pleuhs and Carol Ward, who navigated their way through the process by combining their years of expertise and knowledge. ‘We work together like a good jazz combo because we listen to each other and do not let egos get in the way,’ says Ward, who is vice president and corporate secretary.
The US food company made M&A history in June 2010 after the successful completion of the ‘logistically complicated cross-border US/UK acquisition of Cadbury’, which, at $18 billion, was the largest of its kind within the consumer sector, notes Ward. The complexity of the regulatory challenge and the issues caused by having significant shareholder groups in each country led the judges to put this transaction above the others in the industry.
‘At first it was a transformational transaction, and Cadbury was not receptive to our offers; the situation did not look good,’ recalls Ward. ‘It took a year to deal with the regulatory systems in both countries. We did the largest ever triple-B-rated bond deal; after completing our diligence, an offer came through and we ensured the board had timely information.’
All members of the team were well aware of their designated roles in the overall operation, and the transaction showed the effectiveness of having a highly organized and energetic team. ‘It was like running a marathon,’ Ward says. ‘Therewere some really challenging intellectual and logistical parts, but we derive a lot of satisfaction from that kind of problem solving. There were situations that came up, like the UK takeover code, that we did not anticipate, but we worked through them collectively, as a team.’
Running against Kraft in this category were Burlington Northern Santa Fe, which was nominated for its efficient management of shareholder voting, and PPL Corporation, which was lauded for its team effort in securing regulatory approval. The size and professionalism of these transactions was recognized by the judges, and makes Kraft’s victory all the more impressive. ‘Kraft showed the utmost dedication and professionalism, functioning simultaneously as both a highly skilled in-house legal department and a boutique M&A company,’ said one of the judges.
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