Covington & Burling LLP operates as a limited liability partnership worldwide, with the practice in England and Wales conducted by an affiliated
limited liability multinational partnership, Covington & Burling LLP, which is formed under the laws of the State of Delaware in the United States
and authorized and regulated by the Solicitors Regulation Authority with registration number 77071..
Covington’s Global Strategic Reorganizations team has decades of global experience handling both post- merger integration and complex organizational structuring in support of integration and product and business carve outs, including spin offs. Our team works with client management teams, tax, human resources, and other advisors to identify, scope, and address challenges posed by complex global integration or separation processes. We have supported client structuring projects in industries as varied as consumer products, electronics, industrials, and pharmaceuticals.
We understand that implementation of both integration and separation projects can be a significant drain on our clients’ internal resources, where the teams charged with responsibility for implementation typically still have “day jobs” to perform. Our team drives efficiencies by operating as a single point of contact for global legal structuring, integration, and separation issues for our clients’ project management team, coordinating and managing our legal team and our trusted network of external lawyers to provide seamless advice covering Africa, Asia, Europe, the Middle East, and the Americas, in more than 120 countries around the globe.
In supporting our clients’ integration efforts, we recognize that the success of any merger depends on synergy capture and effective operational business integration, a process involving much more than the mere combination of separate businesses. We also recognize that every integration effort is a bespoke exercise requiring close coordination between the in-house integration teams and other business functions, as well as accounting, tax, and legal. Integration projects may require analysis of areas as diverse as:
Antitrust / Competition
Branding and Intellectual Property
Commercial Integration, including Supply Chain Integrity and Logistics
Compliance and Risk Management (including anticorruption compliance)
Corporate Governance and Disclosure
Cybersecurity
Employee Benefits
Employment, Labor, and Human Resources
Environmental Assessment and Mitigation
Government Contracts and Defense
Labeling and Product Regulatory
Legislative Affairs / Political Law
Licensing, Business Development, and Joint Ventures
Litigation
Procurement, Warehousing, and Distribution Arrangements
Privacy and Data Security
Risk Management and Insurance
Securities and Shareholder Issues
Tax Planning and both Corporate Entity and Trading Structures
Trade Controls and Export/Import Compliance
Treasury Management, Currency, and Anti-Money Laundering (AML) Controls
In separation transactions, we work closely with our clients and their tax and financial advisers to develop a clear separation plan, which may require analysis of each of the substantive areas outlined above. In the initial planning phase we focus on early identification of issues that will impact the proposed timing of the transaction, including legal and regulatory roadblocks to the proposed transaction. We also work closely with our clients’ commercial teams to identify issues that will significantly impact transaction costs, including the rationalization of commercial trading structures, compliance, data, employment, IP, tax planning, and a host of other potential value drivers.
In both integration and separation projects, with our regulatory breadth and depth, our world-class tax structuring expertise, and the quality of our worldwide network of local counsel on corporate, employment, and regulatory issues, we are uniquely well-positioned to tie these pieces together to support our clients' transactional objectives.
We approach integration and separation projects where due diligence leaves off, highlighting high priority, standard, and secondary areas of substance for the project effort. Once the substantive focus has been identified and the scope of work is clearly defined (e.g., through preparation of a tax "Strawman"), we develop detailed legal action plans for implementing the proposed transactions in each jurisdiction. Finally, we move to the implementation phase, in which we coordinate and manage the work of the global legal team to deliver the proposed restructuring on time―and on budget.
We recognize the importance to our clients of budget certainty. Once a legal action plan has been developed we can develop a budget proposal for approval by our client. Once the budget has been approved, we assume responsibility for managing the relationship with local counsel to ensure that they operate to budget for the specific tasks that we ask them to undertake. It is, of course, the nature of these transactions that the restructuring plans change as transactions develop and issues arise and when this happens we implement a monthly reconciliation report that will clearly indicate where proposed changes to the international transactions and/or scope of work are impacting the budget proposal so that our clients have visibility at all times on overall costs of the proposed transactions.
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