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Thought Leaders

Thought Leader

WWL Ranking: Thought Leader

WWL says

Daniel Neff is a standout name in corporate law, hailed for his tremendous expertise in high-value securities and M&A transactions.

Questions & Answers

Daniel A Neff is the co-chairman of the Executive Committee and partner at Wachtell, Lipton, Rosen & Katz. He is a corporate and securities lawyer, focused on mergers and acquisitions and advice to boards of directors and board committees. Throughout his career, he has been extensively involved in negotiated as well as hostile acquisitions, and has represented bidders and targets, public and private companies, private equity firms, leveraged acquirers and special committees of directors. 

You worked on Occidental’s high-profile acquisition of Anadarko Petroleum. What were the complexities of this deal and how has it impacted the energy market?

The biggest challenges were due to the interest of two bidders, each of which sought to acquire our client, Anadarko Petroleum, for a combination of cash and stock. Chevron offered a lower nominal value but its stock was expected to react more favourably to the announcement of a transaction with Anadarko. Occidental Petroleum’s acquisition proposal offered a higher nominal value but presented two related risks — the value of the stock portion of the offered consideration was expected to decline, perhaps substantially, on announcement of a transaction, and its proposal was conditional on obtaining approval of its own stockholders, which created meaningful risk of non-consummation. As a result of its negotiations with both bidders, Anadarko ultimately obtained a high premium, principally cash transaction for its stockholders, which had minimal conditionality. One expected consequence of the Occidental/Anadarko merger will be the reluctance of bidders in the oil and gas sector to make large acquisitions for cash, rather than stock, consideration in view of the adverse market reaction that Occidental has experienced due to the transaction’s timing and terms.

Advising boards of directors forms a major part of your practice. What key pieces of counsel have you imparted to directors in an increasingly challenging M&A environment due to a rise in shareholder activism and a complicated regulatory regime?

First, I try to put directors at ease concerning the legal standards that govern their conduct, which are deferential to directors’ decision-making and highly protective of boards that act diligently. Then, I explain the array of obstacles to transactions, which seem to increase every year. These obstacles include the growing willingness of institutional investors (as well as shareholder activists) to challenge board and management decisions with which they disagree, the global proliferation of regulatory regimes (antitrust, national security, foreign investment) and enhanced regulatory scrutiny and, since the emergence of the covid-19 pandemic, the risk that business performance will significantly underperform (or occasionally, overachieve) expectations, creating risks of non-consummation.

In your opinion, how will covid-19 change the M&A market in the long-term?

I expect little long-term change to M&A documentation arising from covid-19. I base this, in part, on the very limited impact on M&A documentation arising from the Great Recession. In terms of impact on transactions themselves (as compared to the documentation), my expectation is that initially companies and in particular boards of directors will focus even more on business risks when deciding whether to proceed — if “once-in-a-century” events occur with increasing frequency, parties will want to be especially careful. Companies in certain industries may not continue to be willing to operate with relatively high financial leverage, based on the difficulties encountered during the pandemic which may be exacerbated by financial leverage. However, aversion to financial leverage tends to dissipate over time. Finally, the nature of the emergence from the pandemic will have a major impact on the M&A market — will market participants be cautious, or exuberant, or will the impact vary greatly based on industry or market sector? 

How have clients sought to continue transactions during lockdown? Have there been any notable positive or negative changes in how clients approach deals?

The impact of the pandemic has varied greatly by industry – some industries have been hit particularly hard (retail, travel and leisure) while others have done reasonably well (certain technology companies). Some have viewed the current situation as presenting good opportunities for strategic acquisitions while many others have been focused on survival or concerned about the difficulties in projecting their performance over the next several years, which is an important element in M&A transactions. In addition, a considerable number of transactions are now, or have been, the subject of litigation, typically involving the buyer’s obligation to close and whether current circumstances constitute a material adverse change.

What makes Wachtell, Lipton, Rosen & Katz stand out against its competitors?

Ultimately, a firm will stand out based on the results it achieves and the quality of advice it gives to its clients. Our firm’s success is due to a combination of our culture, our people and our experience. Teamwork and cooperation are part of the firm’s DNA and are essential to effectively handle the complicated, cross-departmental (and often cross-border) matters in which we work. Our lock-step seniority-based compensation system reinforces the firm’s “all for one, one for all” client-focused ethos. We all benefit when our clients succeed. An intense work ethic at all levels of the firm, including the most senior partners, is part of our culture. We are privileged to work on the most consequential matters our clients face, and the clients have every right to expect that our commitment and dedication will be commensurate with the gravity of the matter. We have been extremely fortunate over many years in our ability to recruit and retain extremely talented people, who “buy into” our culture. Our relatively small recruiting classes and low associate-to-partner ratio, combined with the intensely interesting nature of our practice, play major roles in enabling this aspect of our success. Our experience enables us to represent our clients most effectively, by providing them the benefit of all that we have done before. And the wealth of experience hopefully enables our advice to reflect excellent judgement, which is ultimately what clients are seeking. Our expertise and experience also enable us to innovate when the situation calls for that. In our culture, the assertion, “that’s never been tried before” is not a complete or dispositive answer.

What advice would you offer to junior lawyers looking to pursue an M&A practice in the current climate? 

Be patient (the M&A market will come back), read every deal you can and spend time on financing transactions. One takeaway from this crisis is to remind us that liquidity is essential and as a result knowledge of financing is ever more important.

You have enjoyed a very distinguished career so far. What would you like to achieve that you have not yet accomplished?

Your question is flattering, but please don’t make me feel old or too comfortable. I’m still learning, the work I do is increasingly interesting and it’s one of the rare career paths where a practitioner can become continually more valuable as time passes. (Our founders/senior partners are proof of that.) On a personal level, I greatly enjoy the mentoring opportunities presented by my work and take great pride in the success of the younger lawyers I have worked with over the years. So, I would like to keep doing what I do, and to do it to the best of my abilities, with the benefit of the many remarkable professional experiences I have had over the years.

Global Leader

Corporate Governance 2021

Professional Biography

WWL Ranking: Recommended

WWL says

Daniel Neff is an experienced corporate lawyer, who demonstrates notable prowess when advising committees and boards of directors.

Biography

Daniel A Neff is the co-chairman of the executive committee and partner in the law firm Wachtell, Lipton, Rosen & Katz, which he joined in 1977. He is a corporate and securities lawyer, and has focused on mergers and acquisitions and advice to boards of directors and board committees. Throughout his career, Mr Neff has been extensively involved in negotiated as well as hostile acquisitions, and has represented bidders and targets, public and private companies, private equity firms, leveraged acquirers and special committees of directors. He has represented companies in divestitures, cross-border transactions and proxy contests, and has counselled managements and boards of directors concerning acquisition matters, responses to shareholder activism, conflict transactions, corporate governance and other significant issues.

Mr Neff lectures frequently on topics relating to his professional interests; was featured in American Lawyer’s “Dealmaker of the Year” article in 2001, 2012 and 2015; and is listed in Chambers Global GuideChambers USA GuideThe Best Lawyers in America and Lawdragon’s 500 Leading Lawyers of America.

Mr Neff has represented clients in a broad range of industries including, among others energy; technology and telecoms; chemicals; pharmaceuticals; manufacturing; retail; and gaming. Significant matters include the successful defence of Airgas against a hostile takeover bid by Air Products and Chemicals (2009-2011); the sale of Airgas to L’Air Liquide; the merger of Anadarko Petroleum with Occidental Petroleum, and Anadarko’s response to acquisition proposals from Chevron; and the $130 billion acquisition by Verizon Communications of the 45% interest in Verizon Wireless owned by Vodafone. He has also represented El Paso in its $38 billion sale to Kinder Morgan; Unocal Corporation in its acquisition by Chevron Corporation for $19 billion, its response to an unsolicited merger proposal by CNOOC Limited and its acquisition of Pure Resources; VoiceStream Wireless in its $55 billion acquisition by Deutsche Telekom; Verizon Communications in its $4.83 billion acquisition of Yahoo!’s operating business; FMC in its simultaneous acquisition of portions of DuPont’s agricultural chemical business, and sale to DuPont of its health and nutrition segment; Actelion in its $30 billion acquisition by Johnson & Johnson and spin-off of Idorsia, which holds Actelion’s R&D pipeline; Medivation in its $14.6 billion acquisition by Pfizer; Cooper Industries in its $11.8 billion combination with Eaton Corporation; Litton Industries in its merger with Northrop Grumman Corporation; Whole Foods Market in responding to shareholder activism and its $14 billion merger with Amazon.com; Sears Holdings in the separation of its real estate assets into Seritage Growth Properties, a real estate investment trust; Penn National Gaming in the separation of its real estate assets into Gaming and Leisure Properties, a REIT, and its $2.8 billion acquisition of Pinnacle Entertainment; Gaming and Leisure Properties in its $5.1 billion acquisition of Pinnacle Entertainment’s real estate assets; Marsh & McLennan Companies in its $6.4 billion acquisition of Jardine Lloyd Thompson Group; Newmont Mining Corporation in its acquisitions of Franco-Nevada Mining Corporation Limited, Normandy Mining Limited and Santa Fe Pacific Gold Corporation; and Knight-Ridder in its merger with The McClatchy Company.

Mr Neff graduated magna cum laude from Brown University and from the Columbia University School of Law, where he was notes and comments editor of the Columbia Law Review.

M&A 2021

Professional Biography

WWL Ranking: Recommended

WWL says

The internationally renowned Daniel Neff stands out among peers for his adept handling of high-profile and complex acquisition proposals.
 

Biography

Daniel A Neff is the co-chairman of the executive committee and partner in the law firm Wachtell, Lipton, Rosen & Katz, which he joined in 1977. He is a corporate and securities lawyer, and has focused on mergers and acquisitions and advice to boards of directors and board committees. Throughout his career, Mr Neff has been extensively involved in negotiated as well as hostile acquisitions, and has represented bidders and targets, public and private companies, private equity firms, leveraged acquirers and special committees of directors. He has represented companies in divestitures, cross-border transactions and proxy contests, and has counselled managements and boards of directors concerning acquisition matters, responses to shareholder activism, conflict transactions, corporate governance and other significant issues.

Mr Neff lectures frequently on topics relating to his professional interests; was featured in American Lawyer’s “Dealmaker of the Year” article in 2001, 2012 and 2015; and is listed in Chambers Global GuideChambers USA GuideThe Best Lawyers in America and Lawdragon’s 500 Leading Lawyers of America.

Mr Neff has represented clients in a broad range of industries including, among others energy; technology and telecoms; chemicals; pharmaceuticals; manufacturing; retail; and gaming. Significant matters include the successful defence of Airgas against a hostile takeover bid by Air Products and Chemicals (2009-2011); the sale of Airgas to L’Air Liquide; the merger of Anadarko Petroleum with Occidental Petroleum, and Anadarko’s response to acquisition proposals from Chevron; and the $130 billion acquisition by Verizon Communications of the 45% interest in Verizon Wireless owned by Vodafone. He has also represented El Paso in its $38 billion sale to Kinder Morgan; Unocal Corporation in its acquisition by Chevron Corporation for $19 billion, its response to an unsolicited merger proposal by CNOOC Limited and its acquisition of Pure Resources; VoiceStream Wireless in its $55 billion acquisition by Deutsche Telekom; Verizon Communications in its $4.83 billion acquisition of Yahoo!’s operating business; FMC in its simultaneous acquisition of portions of DuPont’s agricultural chemical business, and sale to DuPont of its health and nutrition segment; Actelion in its $30 billion acquisition by Johnson & Johnson and spin-off of Idorsia, which holds Actelion’s R&D pipeline; Medivation in its $14.6 billion acquisition by Pfizer; Cooper Industries in its $11.8 billion combination with Eaton Corporation; Litton Industries in its merger with Northrop Grumman Corporation; Whole Foods Market in responding to shareholder activism and its $14 billion merger with Amazon.com; Sears Holdings in the separation of its real estate assets into Seritage Growth Properties, a real estate investment trust; Penn National Gaming in the separation of its real estate assets into Gaming and Leisure Properties, a REIT, and its $2.8 billion acquisition of Pinnacle Entertainment; Gaming and Leisure Properties in its $5.1 billion acquisition of Pinnacle Entertainment’s real estate assets; Marsh & McLennan Companies in its $6.4 billion acquisition of Jardine Lloyd Thompson Group; Newmont Mining Corporation in its acquisitions of Franco-Nevada Mining Corporation Limited, Normandy Mining Limited and Santa Fe Pacific Gold Corporation; and Knight-Ridder in its merger with The McClatchy Company.

Mr Neff graduated magna cum laude from Brown University and from the Columbia University School of Law, where he was notes and comments editor of the Columbia Law Review.

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