Sullivan & Cromwell’s London-based U.K. tax practice works on its own and with offices in the United States and France to provide sophisticated advice, international perspective and unparalleled expertise on U.K. tax matters.
S&C’s U.K. office focuses on:
- mergers and acquisitions,
- corporate restructuring,
- offshore mutual funds,
- real estate financings,
- securitizations,
- project finance, and
- derivatives.
Clients, including major corporations based in or with interests in the United Kingdom, rely on S&C for commercially sophisticated and globally oriented expertise.
SELECTED REPRESENTATIONS
Sullivan & Cromwell’s U.K. Tax team advises clients on a broad range of matters, providing bespoke advice on a number of areas, such as employee benefits, tax-based structured finance and funds, in addition to the team’s considerable experience in mergers and acquisitions and corporate finance transactions. The team also has strong experience advising on tax controversies.
Recent highlights of the U.K. Tax Group’s work include representing:
- Coca-Cola Hellenic Bottling Company, on its transfer of shares to new Coca-Cola HBC (by way of a voluntary exchange offer) and the subsequent primary listing of Coca-Cola HBC on the London Stock Exchange. The team advised on a range of tax matters that arose from the transactions, requiring innovative legal advice.
- Credit Suisse, on its agreements to purchase Morgan Stanley’s private wealth management businesses in Europe, the Middle East and Africa, excluding Switzerland. The transfer of the business is structured as an asset sale and will take place via staggered closings. The businesses being acquired have more than $13 billion in assets under management and are based in the United Kingdom, Italy and Dubai.
A number of tax issues had to be resolved, in particular U.K. and non-U.K. value-added tax issues on the asset sale.
- Fiat Industrial, on its final-stage merger agreement with CNH Global to combine the business of the two companies. Fiat Industrial purchased the remaining shares it does not already own in CNH and re-domiciled to the United Kingdom. The estimated value of the deal is €1.078 billion.
S&C’s tax team demonstrated its ability to provide effective tax advice on a range of issues in relation to this transaction.
- Goldman Sachs and its affiliates, on a sale and purchase agreement with respect to 64 percent of the shares in its wholly owned subsidiary, Rothesay Holdco U.K., to funds managed or advised by affiliates of The Blackstone Group, GIC Private and Massachusetts Mutual Life Insurance. Blackstone and GIC have each acquired 28.5 percent of the shares in Rothesay, with Massachusetts Mutual acquiring a 7 percent holding. Goldman Sachs retains a 36 percent stake in Rothesay.
S&C advised on certain tax aspects of restructuring the target group; the tax aspects of the sale and purchase documentation and employee incentive arrangements put in place at closing.
- Eastman Kodak, in respect of its Chapter 11 bankruptcy and the process leading to its emergence from bankruptcy in September 2013. A key part of that process involved dealing with the major outstanding underfunding issues relating to the Kodak U.K. pension fund, KPP. After extensive negotiation, involving the relevant regulatory authorities, it was agreed that these would be settled in part by selling to the pension fund an existing business (the DI and P1 business) of the Kodak Group.
Given the regulatory complexity and sensitivity involved, detailed attention had to be given to a number of matters, notably: maximizing employer tax relief for contributions to KPP made by Kodak in the United Kingdom as sponsoring employer, avoiding triggering inadvertent tax charges in the U.K. group when outstanding liabilities to KPP were compromised, and ensuring that the process for the business sale did not trigger any of the special tax charges that can apply to regulated pension funds and their sponsoring employers when they enter into dealings with each other.
- Goldman Sachs and its affiliates and funds, in an investment agreement with respect to 50 percent of the voting share capital in the Hastings Insurance Group. The transaction, which also involved new debt financing, implied a net enterprise value of approximately £700 million. The transaction is subject to regulatory approval and customary closing conditions.
The transaction involved putting in place an acquisition structure that ensured effective U.K. tax relief for acquisition finance costs, protection against tax leakage on warranty and indemnity payments, a tax-effective exit strategy, satisfactory resolution of certain U.S. tax exposures for U.S. investors, and putting in place tax-effective management and employee share incentives. Part of the transaction had to be modified to reflect a change in law that occurred during negotiation.
