Magic Circle law firm Linklaters was called in to advise German manufacturing company RENK on its acquisition of UK-based David Brown Defence from Stellex Capital Management, advised by Jones Day.
The transaction combines RENK’s expertise as a leading provider of propulsion solutions for the military sector, along with Huddersfield-based David Brown’s specialisation in high-precision gearboxes for the naval and land defence sectors, including for submarines.
The deal is expected to be completed by the fourth quarter of this year, subject to standard regulatory approvals.
According to Bloomberg, the deal is valued at around $200m.
The Linklaters team advising on the deal was led by corporate and M&A partners Richard Spedding (London) and Klaus von der Linden (Düsseldorf), along with managing associate Lisa Gao.
They were joined by corporate and M&A partner Timo Engelhardt, antitrust and foreign investment partner Natura Gracia, tax partner Chris Smale and IP partner Yohan Liyanage.
Managing associates Karen Clarke (infrastructure and energy), Daniel Gloor (corporate/M&A), Tom Parish (tax) and Balaji Subramanian (antitrust and foreign investment), and associates Stuart Blair and Mirco Schindler (both corporate/M&A) and James Quirke (antitrust and foreign investment), also provided assistance.
The London-based Jones Day team was led by private equity partner Julian Runnicles and included M&A partner Mathis Bredimus, corporate/M&A associates Olivia Prioleau and Axel Susini, tax partner Blaise Marin-Curtoud, tax associate Mélanie Staes and competition, antitrust and foreign investment of counsel Jason Beer.
Runnicles also advised Stellex on its acquisition of DB Santasalo from the UK's N4 Partners in March 2023.
The acquisition will support RENK’s portfolio across the naval sector. The Augsburg-based company will gain access to orders in place across naval programmes in the UK, Canada and Australia, while the purchase will allow it to reap significant synergies at operational and technological levels.
Late in June, Linklaters also advised the Volkswagen Group over its majority stake sale of its marine engine unit Everllence to private equity firm Bain Capital.
Kirkland & Ellis advised Bain on the purchase, while Paul Weiss advised the private equity firm on the financing of the transaction, and Gleiss Lutz counselled Volkswagen’s supervisory board on the sale.
A survey published earlier this month by FTI Consulting showed that M&A activity in the aerospace and defence sector recorded the largest year-on-year improvement compared to any other sector.
Improved regulatory clarity, higher defence spending and renewed access to financing were all credited for the upturn in momentum.
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