By Benjamin Horney

Law360 (September 10, 2020, 7:49 PM EDT) -- The coronavirus pandemic contributed to a more significant summer slowdown than usual, but there were still a handful of eye-popping M&A transactions from the three-month period that illustrate a rising appetite for technology and health care companies and an uptick in the use of special purpose acquisition vehicles.

Between June 1 and Aug. 31, there were a total of 1,824 mergers and acquisitions announced worth a combined $364.6 billion, according to data provided by Dealogic. Although a downtick in deal activity over the summer is nothing new, this year's slowdown was weightier than normal because of the COVID-19 pandemic. In fact there was a roughly 28% drop in overall deal volume this summer compared with last, while total deal value fell by almost 35%, according to Dealogic data.

The volume of this summer's M&A deals represented the lowest since at least 2015, while the overall value of transactions was the lowest since 2017, per Dealogic. The stagnation was felt by M&A attorneys who still found themselves busy, but on other matters, including helping clients find ways to shore up their balance sheets through increased borrowing under credit facilities or alternate deal types like private investments in public equity, or PIPE transactions.

Atif Azher, a corporate partner at Simpson Thacher & Bartlett LLP working out of Palo Alto, California, said that while M&A activity felt subdued early in the summer, it picked up as time went on and was at a fever pitch by the end of August. Typically, it's the opposite, with clients first capping off deals that were already in the works and then activity slowing later in the season.

"It seems to have reversed," he said. "Momentum has picked up tremendously."

Despite the overall dip in deal volume and value this summer compared with past summers, there were still at least 10 M&A transactions with values of at least $9 billion announced in June, July and August, showing that some deal-makers were able to stay active even in an environment fraught with uncertainty spurred by the worst pandemic in a century.

"The pipeline for deals is looking a lot stronger now than it did a few months ago," said David Klein, a corporate partner at Kirkland & Ellis LLP in New York. "For the first time, we're seeing deal activity that is similar to pre-COVID levels."

However, Klein cautioned that if previous recessions are any indication, a full recovery for the M&A markets will take some time.

"We don't have anything in history that's analogous to COVID, but a slower recovery for M&A has been one of the hallmarks of other recessions," he said.

Six of the 10 largest deals from June, July and August were either technology- or health care-related, with two energy transactions, one in the retail sector and one in the telecom sector. The deals that made the list illuminate a number of industry trends, including the increasing popularity of technology and health care businesses and the rising prominence of special purpose acquisition companies.


Here, Law360 counts down the biggest deals from the summer and explores the trends they exemplify.

10. EBay Sells Classifieds Biz in $9.2B Deal Ushered by 8 Firms

Near the end of July, eBay Inc. announced the $9.2 billion sale of its classified ads business to Norwegian marketplace site Adevinta ASA, in a deal the companies said stood to create the world's largest classifieds company.

Wachtell Lipton Rosen & Katz, Thommessen AS, De Brauw Blackstone Westbroek NV and Quinn Emanuel Urquhart & Sullivan LLP advised eBay. Skadden Arps Slate Meagher & Flom LLP and BAHR AS represented Adevinta, and Cleary Gottlieb Steen & Hamilton LLP and Advokatfirmaet Wiersholm AS counseled Adevinta's majority shareholder, Schibsted ASA.

The consideration came in a mix of cash and stock, with eBay receiving $2.5 billion in cash and 540 million Adevinta shares, giving eBay a 44% equity stake and a roughly 33.3% voting stake in the Norwegian company.

Adevinta's offer beat at least two bids to clinch the sale: one from investment group Nasper's technology-focused unit, Prosus NV, and another from a consortium that included private investment companies Blackstone Group Inc., Hellman & Friedman LLC and Permira Advisers LLC, a person familiar with the transaction told Law360 in July.

9. Gibson Dunn, McGuireWoods Guide $9.7B Deal for Energy Assets

A few weeks before the eBay-Adevinta agreement was announced, an affiliate of Warren Buffett's Berkshire Hathaway agreed to buy most of Dominion Energy's gas transmission and storage business in a deal with an enterprise value of $9.7 billion that was put together with help from Gibson Dunn & Crutcher LLP and McGuireWoods LLP.

The transaction saw an affiliate of Berkshire Hathaway Energy picking up more than 7,700 miles of natural gas storage and transmission pipelines, plus about 900 billion cubic feet of gas storage. 

The companies expect to complete the deal during the fourth quarter, assuming it receives necessary approvals, including a green light from the U.S. Department of Energy.

McGuireWoods served as legal counsel to Dominion Energy, while Gibson Dunn advised Berkshire Hathaway.

8. SPAC Deal Steered by 4 Firms Forms $11B Health Care Cost Management Biz

As the end of July neared, a SPAC run by former Citigroup executive Michael Klein agreed to merge with private equity-backed MultiPlan Inc. in a deal that was stitched together by four law firms and will result in a roughly $11 billion health care cost management company.

The transaction involves Klein's Churchill Capital Corp. III and other investors collectively injecting around $3.7 billion into MultiPlan, with around $1.1 billion coming from the money raised in Churchill's February initial public offering and about $2.6 billion being committed by additional investors via a PIPE deal.

As a result of the deal, MultiPlan will be valued at about $11 billion, including debt.

MultiPlan has been owned by investors including Hellman & Friedman and Leonard Green & Partners since 2016. Hellman & Friedman will remain the largest shareholder in MultiPlan, though the size of its stake was not disclosed.

A SPAC transaction making the list is novel. While SPACs existed long before the pandemic, and their use had already been on the rise, the amount of SPAC deals dramatically increased in the wake of the COVID-19 outbreak.

"You have a hyperactive SPAC market where people are raising SPACs on, seemingly, a weekly basis," said Kirkland's Klein.

Although SPACs are unquestionably in demand at the moment, there's no way of knowing how long they'll remain so popular.

"The jury is out as to whether the growth in SPACs has staying power," Azher said. "There are so many out there right now, it will be interesting to see how they continue to evolve."

Weil Gotshal & Manges LLP served as legal counsel to Churchill on the deal, Kirkland and Simpson Thacher advised MultiPlan and Hellman & Friedman, and Latham & Watkins LLP counseled Leonard Green & Partners.

7. NYSE Owner Buys PE-Backed Ellie Mae in Deal Built by 5 Firms

In early August, Intercontinental Exchange Inc., which owns and operates 12 regulated exchanges and marketplaces, including the New York Stock Exchange, agreed to buy cloud-based mortgage platform Ellie Mae from Thoma Bravo for roughly $11 billion, including debt.

Intercontinental Exchange said in a statement that the transaction stood to make it the "leading provider of end-to-end electronic workflow solutions" for the U.S. residential mortgage industry.

The deal featured five law firms: Intercontinental Exchange was advised by Shearman & Sterling LLP, Morgan Lewis & Bockius LLP, Potter Anderson & Corroon LLP and Sullivan & Cromwell LLP, while Thoma Bravo and Ellie Mae were guided by Kirkland.

6. Liberty Broadband, GCI Liberty Ink $10.59B Stock-For-Stock Merger

In a late June filing with the U.S. Securities and Exchange Commission, Liberty Broadband Corp. revealed that it and GCI Liberty Inc. had reached a preliminary, stock-for-stock merger agreement. According to Dealogic, the deal is valued at almost $10.59 billion.

According to the filing, the deal would see Liberty Broadband buy all of the outstanding shares of Series A common stock, Series B common stock and Series A cumulative redeemable preferred stock of GCI Liberty. The exchange ratio is subject to change as the companies continue negotiating.

Debevoise & Plimpton LLP advised Liberty Broadband, while GCI Liberty was advised by Morris Nichols Arsht & Tunnell LLP. Baker Botts LLP acted as regular outside counsel to GCI Liberty, and Skadden Arps Slate Meagher & Flom LLP advised the company on tax matters.

5. Chevron Inks $5B Noble Energy Buy With Help From 3 Firms

In late July, Chevron Corp. agreed to purchase independent energy business Noble Energy in a $5 billion all-stock transaction guided by Paul Weiss Rifkind Wharton & Garrison LLP, Shearman and Vinson & Elkins LLP, in the largest energy deal since the pandemic started.

Chevron, led by Paul Weiss and advised by antitrust counsel Shearman, said the addition of Noble Energy Inc., advised by Vinson & Elkins, would allow it to increase the amount of oil and natural gas it can extract while also helping it strengthen its presence in the Eastern Mediterranean — with Noble Energy's Israeli offshore assets — and in the U.S.

California-based Chevron is buying Noble Energy at a value of $10.38 per share. As a result of the deal, Noble Energy shareholders will collectively own a 3% stake in the combined company.

Strategic acquirers sometimes prefer stock consideration instead of cash when economic conditions are fraught with uncertainty because it's perceived as less risky than cash, Klein said.

"Using their currency, even if it's depressed a little bit, you're still buying a company with stock that's trading at a similar discount," he said. 

4. Latham, Wachtell Steer Varian's $16.4B Sale to Siemens Unit

Announced in the first week of August, German medical technology business Siemens Healthineers AG, advised by Latham, agreed to buy Wachtell-advised Varian Medical Systems Inc. for $16.4 billion in a tie-up aimed at creating the most comprehensive cancer care provider in the world.

Together, the companies will offer a platform of end-to-end oncology services, from screening and diagnosis to personalized treatment and post-treatment care. Palo Alto-based Varian will continue to operate as an independent company and retain its brand name.

The deal was all-cash, with Siemens Healthineers buying all outstanding shares of Varian for $177.50 apiece, or a roughly 42% premium to the average closing price of Varian stock over the 30 days prior to the announcement.

3. Teladoc Health Merges With Livongo in $18.5B Deal Molded by 3 Firms

Unveiled just a few days after the fourth deal on this list, Teladoc Health and privately held chronic health condition management platform Livongo agreed to merge in a $18.5 million transaction put together with help from Paul Weiss, Skadden and WilmerHale.

The deal stands to create a giant in the virtual personalized health care space, with telehealth having become especially popular during the pandemic. The transaction represents an example of how technology and health care became the most attractive sectors to deal in once the pandemic took hold.

"Technology and health care are the two areas we've seen the most consistently stable M&A," Klein said. "That's partially a function of the fact that those industries fared the best during COVID, and were safer investments to make compared to areas like hospitality or retail, where M&A is more distress-based."

2. Wachtell, Akin Gump Drive $21B Sale of Speedway to 7-Eleven

Announced the same day as the Siemens Healthineers-Varian deal, Marathon Petroleum said Aug. 2 it was selling convenience store and gas station chain Speedway to 7-Eleven for $21 billion, in a transaction guided by Wachtell and Akin Gump Strauss Hauer & Feld LLP.

The agreement sees Ohio-based Marathon Petroleum Corp. selling Speedway to Texas-headquartered 7-Eleven Inc., which is a subsidiary of Japan's Seven & i Holdings Co. Ltd. The all-cash acquisition adds about 3,900 Speedway stores across 35 U.S. states to 7-Eleven's portfolio.

Wachtell advised Marathon, while Akin Gump represented 7-Eleven.

1. Weil, Wachtell Steer $21B Deal Creating Semiconductor Giant

Technically tied for the largest deal of the summer, this agreement featured two tech companies, with Analog Devices Inc. agreeing to buy Maxim Integrated Products Inc. in July for almost $21 billion, in a move creating a single computer component company with an enterprise value of more than $68 billion.

Weil advised Maxim, with Wachtell guiding ADI.

The all-stock agreement saw ADI buying Maxim, combining Maxim's strengths in the automotive and data center markets with ADI's strengths across the industrial, communications and digital health care sectors.

Vincent Roche, president and CEO of ADI, said in a statement that "together, we are well-positioned to deliver the next wave of semiconductor growth, while engineering a healthier, safer and more sustainable future for all."

--Additional reporting by Eli Flesch and Sierra Jackson. Editing by Aaron Pelc.

Update: This story has been updated to include additional counsel information.

For a reprint of this article, please contact reprints@law360.com.