Machado, Meyer, Sendacz e Opice Advogados in Brazil and Davis Polk & Wardwell have represented Brazilian mobile phone companies Vivo and Telemig in their corporate restructuring, under new CVM regulations.
Citigroup Global Markets was the financial advisor to the companies in the process announced on 29 May, and took legal advice from Brazil’s Souza, Cescon Avedissian, Barrieu e Flesch Advogados and Jones Day in New York.
Souza Cescon’s Tiago Peres says, “This was the biggest corporate restructuring after the enactment of Parecer 35/08 by the Brazilian securities and exchange commission (CVM).”
“The Parecer sets forth several principles and procedures to be observed by companies and their management, aiming at increasing transparency and equitable treatment of shareholders. In this sense, the transaction will most likely set a benchmark of procedures and transparency for future transaction of this nature in Brazil,” he explains.
Vivo is Brazil’s largest mobile phone operator with an annual revenue of over BR$15 billion (US$7.6 billion).
Last year, the company paid US$640 million to acquire controlling stakes in rivals Telemig and Amazônia Celular, and the restructuring sees the merging of Vivo and Telemig’s shares.
Citi made a valuation report assessing the relative worth of the shares of each of the companies, and says this was one of the first valuation reports under the new M&A regulations in Brazil, made to a committee of the CVM convened to assess the companies’ share ratios.
Machado Meyer’s Adriana Pallis says, “We had to work simultaneously with the committee and the management of the company, discussing the legal and financial aspects. This was different from other transactions in which the committee was formed after the share ratios were calculated.”
Wade Angus of Jones Day says, that even though using the new regulations is not mandatory, he thinks “companies that are concerned about corporate governance will follow the CVM’s advice in future affiliated transactions.”
The merger increased Vivo’s market share to 33 per cent, and brought the company an additional five million subscribers, taking its total to 35 million.
Counsel to Vivo
              Machado, Meyer, Sendacz e Opice Advogados
Partner Adriana Pallis Romano and associates Paula Seabra Carvalho and Matheus Costa
           Davis Polk & Wardwell
Partners Diane Kerr and Michael Mollerus and associates Joana Benjamin, Alexander Macleod, Charlene Choi, Kay Ng and Niya Tang
Counsel to Citi
           Souza, Cescon Avedissian, Barrieu e Flesch Advogados
Partner Marcos Rafael Flesch and associates Tiago Peres and Daniel Laudisio
           Jones Day
Partner S Wade Angus, counsel Nicholas Rodriguez and associate Elie Sherique
(latin Lawyer 19.06.2009)
(Notícia na íntegra)