17 Aug 2022

Jones Day, Sullivan & Cromwell advise Bayer on 'landmark' arbitration ruling against BASF

ICC arbitration centred on M&A dispute involving assets Bayer had sold to BASF

Bayer agro show, stand and bayer logo and rice crops out of focus. Bayer Crop Science

Dan Su Sa; Shutterstock

US firms Jones Day and Sullivan & Cromwell have helped German pharmaceutical and biotech company Bayer secure a ‘landmark’ victory in a post-M&A arbitration against German chemicals company BASF.

The arbitration tribunal at the International Chamber of Commerce (ICC) was centred on claims made by BASF, advised by Freshfields Bruckhaus Deringer, that Bayer had not properly disclosed the cost structure of businesses the chemicals company had acquired from Bayer, resulting in it overpaying for those businesses.

BASF had purchased more than €7bn of assets related to seeds and pest control businesses that Bayer was forced to offload as part of its acquisition of US agrochemical company Monsanto. German magazine Handelsblatt reported that around €1.7bn plus interest was at stake in the dispute. The ICC ruled in favour of Bayer, dismissing in full all claims asserted by BASF, bringing to an end three years of proceedings.

The Jones Day team advising Bayer was headed by M&A partner and its German business partner-in-charge Ansgar Rempp in Düsseldorf and global disputes partners Johannes Willheim in Frankfurt and Paris and Tom Mahlich in Frankfurt. Also on the team was M&A partner Martin Schulz in Munich, global disputes partner Amy Kläsener in Frankfurt, M&A of counsel Zhaoxia Chen in Düsseldorf and M&A and private equity counsel Korel Kaplan in Munich.

Sullivan & Cromwell – which advised Bayer on the original M&A deal – acted as co-counsel. The team included New York-based intellectual property and technology litigation co-head Dustin Guzior, litigation partner Rick Pepperman, former partner Steven Holley, special counsels Akash Toprani and Bill Wagener and associates Alex Gross, Colin Hill and Michael Lemanski.

Bayer’s in-house counsel included senior legal counsel Max Thümmel and senior counsel Thomas Reuter.

Freshfields, a longstanding adviser to BASF, had also advised its client on the orignal M&A deal. Its team on the arbitration, as reported by Juve, featured Boris Kasolowsky and Carsten Wendler in Frankfurt and New York-based Elliot Friedman and Lee Rovinescu.

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