Allen & Overy advises Société Générale on the proposed acquisition of the EMC business of Commerzbank Aktiengesellschaft
05 July 2018
Allen & Overy has advised the French Société Générale, Paris, on the proposed acquisition of the Equity Markets & Commodities (EMC) business unit of Commerzbank Aktiengesellschaft ("Commerzbank").
Commerzbank's EMC business comprises the issuance of and market-making in structured trading and investment products, the established exchange-traded fund (ETF) brand Comstage as well as the related leading ETF market-making platform. In autumn 2016, Commerzbank had already announced in the context of its new strategy that it intended to spin off the business. Most recently, the business generated EUR 381 million in revenues.
Société Générale, which through its subsidiary Lyxor is among the leading ETF providers in Europe, will complement its own ETF activities with this acquisition.
In line with Société Générale strategy to further extend its Global Banking and Investor Solutions activities by leveraging on its strengths, the acquisition of these activities from Commerzbank would reinforce the bank’s global leadership in derivatives and investment solutions across asset classes and would contribute to Lyxor’s development in Europe by boosting its ETF franchise and complementing its active management offering with a set-up and a product range well-suited to answer the needs of German institutional clients in particular.
Upon integration, this transaction would bring numerous benefits to clients: the reach and geographical footprint, an extended cross-asset product set, the technology and expertise from two associated leading platforms.
The business unit was transferred by way of an asset deal. More than 100,000 notes and other trading positions had to be transferred individually as part of the deal, which is one of the reasons why this transaction is among the most complex M&A deals of this year in Germany.
The transaction is subject to pre-clearance with competent tax authorities, approval by further relevant authorities and the required steps towards social partners as well as the finalization of legal documentation.
The international Allen & Overy team assisted Société Générale in this transaction during the bidding process since October 2017 and has provided comprehensive advice to the bank, including on all M&A related aspects as well as questions of capital markets, banking regulatory, employment and tax law.
The team was led by partners Jean-Claude Rivalland (Corporate/M&A, Paris), Martin Scharnke (Capital Markets, Frankfurt), Paul Cluley (Capital Markets, London) and Dr Hartmut Krause (Corporate/M&A, Frankfurt) and further comprised partners Dr Alexander Behrens (Financial Services Regulation), Dr Hans-Peter Löw (Employment), Dr Heike Weber (Tax, all Frankfurt), Florence Ninane (Competition, Paris), counsel Dennis Kunschke, of counsel Frank Herring (both Financial Services Regulation, both Frankfurt), senior associate Ralph Salameh (M&A, Paris), Ann-Kathrin Balster, Amar Memic (both Capital Markets), Kai Schadtle (Financial Services Regulation) and Tatiana Marzoli (Corporate/M&A, all Frankfurt).
The team comprised additional lawyers from the Allen & Overy offices in Paris, London, Luxembourg, Hong Kong and New York.