Mergermarket: V&E, Latham, and Fulbright Led Texas M&As in 2011

By Mark Curriden
Why are so many global corporate law firms opening offices in Texas? Because this is where the deals are.
This was especially true in 2011, when the number of Texas businesses merging, buying or selling remained steady and strong, primarily because of transactions in the energy industry. Texas-based law firms and national law firms with offices in the state benefited the most.
Mergermarket’s annual report card of M&A legal advisers shows that Vinson & Elkins, Latham & Watkins, and Fulbright & Jaworski did the most deals last year.
Not only were the volume of the deals up, but the size increased, as well. The two largest U.S. deals announced in 2011 involved Texas-based corporations: AT&T’s failed effort to merge with T-Mobile, valued at $39 billion, and Kinder Morgan’s $37 billion acquisition of El Paso Corporation.
Of the 15 law firms who handled the most Texas mergers and acquisitions, only three – Kirkland & Ellis, Sullivan & Cromwell, and Wilson Sonsini – do not have offices in Texas.

“Firms with Texas roots still handle most of the deal-flow in the state,” says Chad Watt, a writer for mergermarket in Dallas. “Larger deals have brought in more international advisors to Texas. Their presence proves that Texas is where the action and opportunities are.”
V&E retained its top spot, as it represented 51 companies buying, selling or merging in 2011. Latham, which has only been operating in Texas for two years, leaped to number two, tied with Fulbright with 39 deals. Two Dallas-based firms, Gardere and Haynes and Boone, reclaimed positions in the top 15.
“Energy M&A in 2011 was very active,” says Robin Fredrickson, an energy M&A partner at V&E in Houston who has handled about a dozen billion-dollar-plus oil and gas deals during the past few years.
“2011 was my busiest year ever,” says Fredrickson. “The size of the deals in 2012 may not be as large as past years, but I see a lot of activity brewing out there.”
Mergermarket agrees. It reports that the Energy, Mining & Utilities sector had four of the top 10 deals globally in 2011. Energy-related M&A in the U.S. accounted for nearly 30 percent of all deals and had a total value of $238 billion.

And no one is predicting that the number of energy transactions, especially in oil and natural gas, are going to slow down any time soon. Each of those deals means significant fees for the lawyers involved.
Earlier this month, China Petrochemical, known as Sinopec, announced a $2.5 billion joint venture with Devon Energy in early January. Fulbright represented Sinopec while V&E represented Devon.
“I give the M&A energy environment a B+,” says Jim Rice, an energy law partner at Akin Gump in Houston. “We’ve seen three large shale deals just in the past several weeks. The question is, who is left to do those deals?”
With natural gas prices reaching historic lows just a couple weeks ago, energy lawyers such as Rice are witnessing a shift in the appetites of those with money wanting to buy into the shale play.
“The industry is clearly falling in love with the liquid, and as a result, investment capital will be moving away from the purely dry play,” he says.
Rice says the Chinese oil companies will continue to be buyers.
“The driving factor behind international companies, especially the Chinese, is the opportunity to obtain technology transfer,” he says. “The technology and know-how in designing a well project and handling the fracturing is invaluable.”
You can obtain more information on the report at www.mergermarket.com.