Canadian Law Awards recognize legal excellence across major transaction categories
At Wednesday’s gala, the deals categories paid tribute not only to lawyers but to the sophisticated transactions they steered to success.
Among the winners in the deals categories, chosen from the excellence awardees announced last month, was Royal Bank of Canada’s $13.5 billion acquisition of HSBC Bank Canada.
HSBC agreed to sell its business in Canada to RBC in November 2022, and the acquisition was completed in late March last year.
Blake, Cassels & Graydon LLP represented the Royal Bank of Canada, while Stikeman Elliott LLP and Linklaters LLP acted as Canadian and UK legal advisers to HSBC Global.
Blakes’ team consisted of over 100 timekeepers spanning corporate, M&A, competition, securities, employment, pensions, tax, financial services, real estate, information technology, IP, litigation, and privacy, with assistance from A&O Sherman in the UK and Wachtell in the US.
Stikeman Elliott’s team spanned corporate/M&A, competition, securities, financial services regulatory, tax, pensions and benefits, litigation, employment, information technology and privacy, intellectual property, and real estate.
“It was a quintessential demonstration of fantastic teamwork both across the business lines and the functional groups at RBC and with our external partners, including the law firms. I think this resulted in a great outcome for all the stakeholders,” said Chris Flood, managing director and assistant general counsel at RBC.
RBC acquired 100 percent of the issued common equity of HSBC Bank Canada for an all-cash purchase price of $ 13.5 billion, in the largest completed bank acquisition in Canadian history.
It resulted in RBC welcoming 4,500 employees and 780,000 clients from HSBC Bank Canada and its subsidiaries.
The deal primarily stretched across Canadian and UK jurisdictions, with HSBC headquartered in the UK, and RBC headquartered in Canada. However, given the diverse customer base and global reach of both organizations, advice was required from several other jurisdictions internationally, including the US, Asia, South America, and others.
Flood added that the deal was done seamlessly, especially considering its size. As he added, a large, multi-disciplinary team of in-house counsel and external advisors worked for more than 18 months to finish acquisition efforts while simultaneously working on the integration of the country’s largest and seventh-largest financial institutions.
“I learned a huge amount about the issues you can encounter in the integration of such an enormous transaction,” he said.
The size of the deal was the most challenging part for the legal teams as well.
“The biggest takeaway for us is that it was the biggest banking deal in Canadian history, and it is likely to stay the biggest banking deal unless the legislation changes,” said Meaghan Obee Tower, a partner at Stikeman Elliott, referring to the competition rules in place for the banking sector.
Despite its size, the system and data integration proceeded smoothly, she added. However, securing the regulatory and competition approvals, as well as tracking all of the securities registrations, was the harder part.
“The process took a life of its own, and it was a pretty significant work stream as there was a significant chunk of work that wouldn’t exist in any other kind of a deal.”
While the number of people involved in the deal was significant, the core legal team remained relatively small when you take into account the size of the deal, said Michael Decicco, a partner at Stikeman Elliott.
The reason for that, he said, is that both banks have strong in-house legal departments, which made the process smoother for the external counsel as well.
The top capital markets deal awarded at the CLA gala was TC Energy Corporation’s C$7.9 billion notes offering for its liquids-pipelines business spinoff.
Blake, Cassels & Graydon LLP served as counsel to TC Energy. The legal team said the transaction required skilled coordination across multiple legal workstreams.
TC Energy Corporation, a major North American energy sector player, spun off its liquids pipeline business into South Bow Corporation as a part of a broader plan to separate the company's liquids pipelines business from its core natural gas, natural gas storage, and power and energy solutions businesses.
Under the terms of the transaction, TC Energy shareholders retained their current ownership in TC Energy, while also receiving 0.2 shares of South Bow for every common share of TC Energy held.
The value of the transaction was $14.5 billion, which includes $7.9 billion of debt that South Bow issued to repay TC Energy. The spinoff created two independent, investment-grade energy infrastructure companies, able to pursue more focused growth strategies.
The spinoff transaction also required the establishment of a new dual-listed public company on the Toronto Stock Exchange and the New York Stock Exchange – effectively an initial public offering of South Bow combined with an M&A transaction in which the applicable assets, liabilities and employees were transferred from TC Energy to South Bow.
Jeff Bakker, a partner at Blakes who worked on the deal, said that the size of the note offering and the strategic importance of the project itself were the main challenges tied to the implementation of the deal.
“There was a lot of pressure and stress involved, and a lot of expertise needed to make sure that nothing went wrong because of the size and the complexity of it. It was the largest bond offering in Canadian history,” he said.
The $200 million sale of the Kingsvale Transmission Line between Trans Mountain Corporation, Lower Nicola Indian Band indigenous group, and EPCOR has been awarded the Mid-market deal of the year.
Its significance lies in the fact that it was the first deal in Canada where a single indigenous group became a majority owner and active participant in the operations and maintenance of a high-voltage transmission line, said Andrea Boctor, a partner at Osler, Hoskin & Harcourt LLP, a legal advisor for Trans Mountain.
The transaction, she added, represents the next step in energy project transactions with indigenous nations and in the energy industry's commitment to furthering partnerships and pursuing economic growth with indigenous nations.
“Osler had the pleasure of assisting the incredibly capable and creative Trans Mountain team and getting the deal done. Heartfelt congratulations to Trans Mountain legal department, the EPCOR legal department, BLG and Dentons and, of course, to the Lower Nicola Indian Band for this recognition,” she added.
Tacora Resources Inc.’s restructuring under the Companies' Creditors Arrangement Act (CCAA) won the CLA in the insolvency and restructuring category.
Stikeman Elliott LLP served as counsel to the debtor, Tacora, while Bennett Jones LLP acted for the primary creditor group, and Cassels Brock & Blackwell LLP represented FTI Consulting Canada Inc.
Davies Ward Phillips & Vineberg LLP served as counsel to CrossingBridge Advisors, LLC, Goodmans LLP advised Cargill, Incorporated and Cargill International Trading Pte Ltd., and McCarthy Tétrault LLP represented the controlling shareholder in the Tacora CCAA process.
Osler, Hoskin & Harcourt LLP acted as lead counsel for Millstreet and OSP.
Lee Nicholson, a partner at Stikeman Elliott, said the deal was challenging primarily because the two main stakeholders in Tacora, bondholders and Cargill, had opposing views on what should happen with the company.
“We as a firm needed to navigate through their visions so that Tacora could recapitalize and ramp up its production and get to the other side of its debt and liquidity issues,” he said.
The situation was made even more complicated as the price of iron ore dropped during the litigation, which further strained Tacora’s liquidity. This effectively made the original deal with the bondholders impossible to conclude and brought the legal teams “back to the drawing board,” as Nicholson put it.
“It was a long process to get the company through, mainly because of different views of the two main parties, but ultimately we got an outcome that allowed the company to emerge from CCAA.”
He added that the ruling on the resulting “reverse vesting” share transaction will serve as a precedent for similar deals in the future.
In June 2024, Coastal GasLink Pipeline Limited Partnership completed a private placement of $7.15 billion of first lien senior secured notes.
The offering was comprised of multiple series of senior notes with staggered maturities and represented at the time the largest Canadian dollar-denominated corporate bond offering.
It was distributed globally and broke several records for the Canadian corporate bond market, including the largest order book, the largest offering size and the most tranches issued at once.
“This deal was the largest public financing and refinancing deal in Canadian history. It continues to be a very important deal for our company and for our project,” said Karyn Vernon, director of legal at Coastal Gaslink.
The proceeds of the bond issuance and the associated interest rate swap were used to refinance approximately $8.2 billion of borrowings under CGL's construction credit facility, which were used to fund the construction and commissioning of the Coastal GasLink pipeline system.
CGL, the owner of the pipeline system, is owned by affiliates of TC Energy Corporation, Kohlberg Kravis Roberts & Co. L.P., and Alberta Investment Management Corporation.
Blake, Cassels & Graydon LLP acted as counsel to Coastal GasLink Pipeline, while Norton Rose Fulbright Canada LLP advised the Joint Lead Agents. Osler, Hoskin & Harcourt LLP represented KKR and AIMCo.
The biggest obstacle that the teams working on the deal had to overcome was its size and complexity, Vernon said.
She added that the project status, expected completion time and in-service timing, commercial arrangements and financial metrics were continuously developing throughout the transaction, adding increased complexity to the various transaction workstreams.
“We learned firsthand about the amount of coordination that's required among lawyers, among businesspeople, and among executives in order to bring everything together for something like this. There's a project-management aspect to it that I think people don't really realize,” Vernon said.
See the full list of winners here and on the Canadian Law Awards website.
