The COVID-19 pandemic has not halted M&A mega-deals. In 2021, there were nine deals valued at more than $20 billion, including:
- Discovery, Inc. and AT&T Inc.’s WarnerMedia business
- Altimeter Growth Corp. and Grab Holdings Inc.
- Canadian National Railway Company and Kansas City Southern
- Lionheart Acquisition Corporation II and MSP Recovery, LLC
- Canadian Pacific Railroad Limited and Kansas City Southern
- AerCap Holdings N.V. and GE Capital Aviation Services
- Oracle and Cerner
- ConocoPhillips and Permian Assets owned by Shell Enterprises LLC.
- Kimco Realty Corporation and Weingarten Realty Investors
- Gores Guggenheim, Inc. and Polestar Performance AB
The five largest M&A deals of this year are in a range of industries and sectors.
The largest transactions was the $43 billion deal between Discovery Inc. and AT&T Inc.’s WarnerMedia business, announced on May 17. Pursuant to the deal, WarnerMedia and Discovery would combine operations to create a standalone entertainment company. Discovery President & CEO David Zaslav will lead the new venture with executives from both companies in key roles. The mixed cash and equity deal will see AT&T shareholders receiving 71% of the new entity and Discovery shareholders receiving 29% stake in the new entity. The deal was structured as a Reverse Morris Trust transaction. AT&T’s WarnerMedia was represented by Sullivan and Cromwell LLP with financial advisors LionTree Advisors LLC and Goldman Sachs & Co. LLC. Discovery was represented by Debevoise & Plimpton LLP. Discovery’s financial advisors were Allen & Company LLC and J.P. Morgan Securities LLC.
The $40 billion deal between investment company Altimeter Growth Corp. and Grab Holdings Inc., announced on April 13, is the second largest deal of the year. Grab, an app for food delivery, hailing rides and digital wallet payments in Southeast Asia, will go public with its agreement with Altimeter Growth. Reportedly, this was “expected to be the largest-ever U.S. equity offering by a Southeast Asian company.” The public entity will trade on NASDAQ under the “GRAB” symbol. Grab was represented by Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates as well as Hughes Hubbard & Reed LLP. Grab’s financial advisors were Evercore and J.P. Morgan. Altimeter was represented by Ropes & Gray LLP as well as Travers Thorp Alberga.
Freight railway company Canadian National Railway Company and Kansas City Southern, the company with the cross-border rail line from the U.S. to Mexico, announced their intentions to merge in a $33.6 billion deal on May 21. The two companies intended to “create the premier railway for the 21st century” by creating an express route from Mexico through the U.S. to Canada. Kansas City Southern was represented by Wachtell, Lipton, Rosen & Katz; Baker & Miller PLLC; Davies Ward Philips & Vineberg LLP; WilmerHale; and White & Case, S.C. Its financial advisors were BofA Securities and Morgan Stanley & Co. LLC. Canadian National Railway was represented by Cravath, Swaine & Moore LLP; Norton Rose Fulbright; Torys LLP; and Stikeman Elliot LLP. Canadian National’s financial advisors were J.P. Morgan, RBC Capital Markets and Centerview Partners LLC.
However, in September, Kansas City Southern terminated this deal and entered into an agreement with Canadian Pacific Railway Limited. Pursuant to this new agreement Canadian Pacific will acquire Kansas City Southern for $31 billion. Similarly, this deal will help to create a U.S. – Mexico – Canada rail network, allowing “unprecedented reach via new single-line hauls.” Kansas City Southern is represented by Wachtell, Lipton, Rosen & Katz; Baker & Miller PLLC; Davies Ward Philips & Vineberg LLP; WilmerHale; and White & Case, S.C. Its financial advisors are BofA Securities and Morgan Stanley & Co. LLC. Canadian Pacific Railway is represented by Sullivan and Cromwell LLP; Bennett Jones LLP; the Law Office of David L. Meyer; Creel, García-Cuéllar, Aiza y Enriquez, S.C.; Black, Cassels & Graydon LLP.
The SPAC deal between Lionheart Acquisition Corporation II and MSP Recovery, LLC, valued at $32.6 billion and announced on July 12, was the fourth biggest deal of the year, in terms of dollar value. As part of the transaction, MSP, which specializes in Medicare Secondary Payer recovery rights and recovering improperly paid Medicaid, will go public. MSP Recovery and its sellers were represented by Weil, Gotshal & Manges LLP and its financial advisor was Keefe, Bruyette & Woods. Lionheart was represented by DLA Piper and its financial advisor was Nomura Securities International, Inc.
Aircraft leasing company AerCap Holdings N.V. and GE Capital Aviation Services, owned by General Electric Company, had the next largest deal at $30 billion. The deal, announced March 10, was a mixed cash and equity transaction. The divestiture will allegedly allow GE to focus on its core industries, while the deal will help “create an industry-leading aviation lessor with a broader offering and better ability to serve customers through industry cycles.” GE was represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP as well as Clifford Chance and A&L Goodbody. Its financial advisors were PJT Partners LP and Goldman Sachs. AerCap was represented by Cravath, Swaine & Moore LLP.
These mega-deals represent a variety of transaction types from merger to companies going public via SPACs, all propelled by the booming M&A market.
