M&A, and Corporate Restructuring
''We are positioned to assist on a very individual basis both private, corporate and institutional aircraft investors worldwide with tailor-made solutions.''
An Interview with Michael Siebold
Managing Partner - Arnecke Sibeth
Our special interview on Profitability with Micahel Siebold, Founder, and Managing Partner of Arnecke Sibeth, explores corporate restructuring, taxation,mergers and acquisitions, as Executive Global take an exclusive peak behind
the operations of one of Germany’s most distinguished legal service providers.
EG: What are some of the common challenges you are confronted with concerning mergers and acquisitions that need to be addressed to ensure profitability within both domestic and cross-border transactions?
Michael Siebold: One of the most common challenges we are confronted with to ensure profitability is todetermine an appropriate fee estimate or fee cap when we are asked to submit a proposal to a potential client. In particular, the final costs of legal advice in an M&A transaction depend on various imponderables, such as the scope of the transaction, the complexity of issues, the period of time, the number of negotiation rounds necessary,the quality of the data room etc, which are impossible to determine precisely at the beginning of an M&A transaction.Therefore, for us to ensure profitability of our legal services, it is indispensable that our fee estimate / fee cap is based on correct assumptions of the aforementioned factors while bearing in mind possible budgets of the potential client. By the same token, fairness between the parties when determining the true added value we provide as outside counsel is a prerequisite.
EG: How significant of a role do mergers and acquisitions play in the global marketplace,and what would you say have been the major milestones within this field?
MS: Global M&A activities were strong throughout the year 2015 with 16,837 transactions worth USD 4.3tn. One of the main reasons for such strong M&A activities, was that firms had realized that they can only meet the global challenges (e.g. stronger global competition) by means of consolidation. Recently, there have been more and more mega deals, mainly in the pharmaceutical / life science industry. For example, the largest deal in the pharmaceutical industry in M&A history occurred in 2015 when US-based Pfizer announced the acquisition of Ireland-based Allergan for USD 183.7bn (abandoned). The trend towards such mega deals is continuing in 2016, e.g. in the hospitality industry where currently both US-based Marriott International Inc. and China’s Anbang Insurance Group, are offering to buy Starwood Hotels and Resorts Worldwide Inc., owner of the Sheraton and Westin hotels, for approximately USD 13.6bn.
EG: When dealing with M&A proceedings, how would you typically advise executives who may have trouble handling complications arising from a hostile takeover?
MS: In hostile takeover situations, executives face the most difficult situation of having to assess what is best for the shareholders, the company itself, as well as the employees, all on a rather rudimentary fact basis, concerning the true situation of the hostile bidder. Our approach has successfully been to identify exactly how we as outside counsel can assist the executive to achieve what he believes is a successful transaction, we ask, listen and then respond.
EG: In what ways have recent changes in German insolvency law under ESUG reform had animpact on German corporate bankruptcy, and insolvency based restructuring?
MS: ESUG is still young as a concept in Germany,however gaining importance. Our AS Consulting company is heavily involved in assisting companies and entrepreneurs in situations falling under ESUG. Our practice in this area is growing along with the market.
EG: You have expertise in developing tax models for companies, asset management firms, and foundations. What sort of macroeconomic trends do you forsee impacting tax legislation within the next 12 Months?
MS: Similar to trends in the EU and elsewhere, weexpect that Germany will introduce tax legislation to make the avoidance of tax payments in countries where successful business activities are undertaken more difficult, if not impossible. We shall assist in complying with, and being prepared for any such changes.
EG: Frankfurt based Arnecke Siebold, and Munich based Sibeth recently merged toform Arnecke Sibeth. Tell us about some of thecompetitive advantages available to new clients,who will now be able to draw upon the combined expertise of your award-winning firm.
MS: Arnecke Sibeth is now a national firm with aninternational focus, with fully integrated teams working seamlessly across four offices, six practice groups and twelve industry sector groups,in many languages and hands on. The implication ofthe scope and depth of our portfolio in selected focus areas for our clients is: full service at thehighest level.
EG: You have an established network, operating within the world’s mostimportant legal systems. How would you say that your strong international focus has enabled you to maximize efficiency, and profitability within the global aviation, transportation, and logistics sector?
MS: By working with colleagues around the globe in dedicated and elite global networks,Arnecke Sibeth is in a position to deliver the same quality of service worldwide. Whilst local laws areapplied by our local experts on the ground, we can project manage based on our expertise and hence compete on a global stage.
EG: The aviation sector has seen a significantamount of M&A activity in recent years. What kind of solutions are you able to provide to aircraft owners, as well as national, and international airline firms?
MS: Aircraft investors have more options today with a lot of product on the market and diversified financing models. We are well positioned to assist on a very individual basis both private, corporate and institutional aircraft investors worldwide with tailor-made solutions. EG