Cross-Border M&A Strategy: Navigating Complex International Deals with Arash Attar-Rezvani

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1:04I'm Kisan Patel and you're listening to M &A Science, where we talk with deal professionals and learn valuable lessons from their experience. This podcast focuses on stories, strategies, and what actually happened during M &A deals.

1:29Hello and welcome to the M &A Science Podcast. This podcast is part of a mission to rethink how M &A is done. That old school seller-led approach, it's dead. Buyer-led M &A is all about strategy, alignment, and efficiency, putting value creation at the center of every deal. And let's be real, it's not just about closing the deal, It's about making it successful. We uncover what truly works in M &A by learning directly from the best. I'm your host, Kisan Patel, founder and CEO of Dealroom and chief scientist at M &A Science. Today, I'm joined by Arash Atar Razvani, M &A partner at Skadden, based in Paris.

2:11Arash has spent over two decades advising on some of the most complex cross-border M &A transactions in the world, from telecom to tech to luxury. His deals span multiple jurisdictions, legal systems, and cultures. In this conversation, we unpack how to structure international M &A deals, navigate regulatory landmines, and build creative legal structures when no playbook exists. Arash, how are you doing today? Hey, Kirsten. Great. I'm delighted to be here. Bonjour. Thanks for hosting me here live in Paris at Skandin's office. Enchanté. It's my pleasure. I'd love to kick things off just to brief on your background.

2:49I'm French and Persian. My name is a Persian name. Atar Esvani actually means the perfume seller of paradise. I was born here. My parents are both from Iran, met in Paris 10 years before the revolution. My father was a world-renowned photographer, a war photographer. What you see behind me is photography of Muhammad Ali during this fight in 1974 in Zaire called the Rumble in the Jungle against George Foreman. The reason I'm mentioning this is because a lot of my background has to do with an international context. And I think if I now work in international law, a lot of it probably comes from my family background.

3:27I have English Jamaican brothers and in my family, close family, there's Venezuelans, Colombians, Singaporeans, British, Persians and French. And this is just my father and my brothers and so on. Coming from this kind of a background, it was natural for me to study international law, which I was very fortunate to be able to do both at the Sorbonne here in France. And then I went to Oxford University in England to study for a master's degree, came to Skadden, worked for a few years, and then went to Columbia Law School in New York, where I could further my education. and spent a year in Skadden's New York office in 06 or 07, just before the financial crisis, before coming back full-time in Paris in 2007, when I've been doing M &A and basically going up the echelons of the promotions here at Skadden.

4:16I've spent all my career, almost 25 years in September, at this great firm. 25 years at Skadden. I can imagine you worked on all types of deals, but what keeps you engaged and locked in over here at Skadden? First and foremost, I'd say the people. I was recruited by somebody who became my mentor and friend, Pierre Sarbon-Schrebert, who was the managing partner here for the first 15 years of my career at Skandin in Paris. And he was just a great guy. In the office, he has this mug that says, world's best boss. I had the world's best boss. It wasn't just a joke. The people, and not just Pierre, everybody from Armand, who's our managing partner today, to generations upon generations of lawyers who have come.

4:58and now I'm by presence the oldest lawyer in the office. And it's just the people. Of course, the deals were amazing. The firm is amazing. The collegiality of the firm. But great deals you have in lots of places. People of that quality, that justified it. I've been here since the beginning and always saw myself at Scand. Can you tell me a little bit about just your journey or the types of deals that you've worked on? I started the first few years doing capital markets work, IPOs, privatizations of Air France, Telecom, these kinds of deals. Just before going to New York, I switched to M &A. My practice basically has been public and private M &A.

5:36And today I work mainly with clients that we developed here in Paris in telecom and tech. One of them is Xavier Niel. He's a French entrepreneur and billionaire who has built the sixth largest, fifth largest European telco with his team at Iliad and NJJ. is we've been doing a lot of telecom work. I'd say one of the highlights was last year when we worked on this multi-jurisdictional takeover and the offer of Millicom, which is very unique, but at the same time, for some reason, this is most of the groups that I represent these days are a little like this, very multi-jurisdictional. Millicom is a group that is incorporated in Luxembourg, was listed in New York, NASDAQ, and in Stockholm and has all these operations exclusively in Latin America.

6:23They used to have them in Africa with another client, by the way, we bought operators from Millicom in Senegal and Tanzania. But when we did the tender offer, they were based in nine or 10 Latin American countries. So it presents unique challenges. You have to be quite agile to tackle. L 'Occitane, the premier skincare brand, also a client we've been advising for about 10 years on all its acquisition, including Sol de Janeiro, which most people will know by now. Yeah, I've been working on a wide array of public-private transactions, JVs, energy work, renewable energy, battery cells, photovoltaic, etc.

6:58You ever worked on a deal that just fundamentally changed the way you think about M &A? I would say probably my first one. The one I did in 2004, it was Quicksilver's acquisition of Rossignol. Quicksilver, as you may know, is this apparel brand that sells surfing, you know. And back then, Quicksilver was actually led by a French CEO, Bernard Mariette. double digit growth. This is early 2000s, the brand was exploding. And Rossignol was the opposite. They called it actually, they termed it the alliance of the sea and the mountain. Rossignol is this international, based in France, but international ski brand.

7:37And they at that time sold a lot of hardware, skis, and they had these unique partnerships with world champions, Olympic champions. That's the first, I mean, talk about being fortunate. I had never done any M &A. I told Pierre, listen, after four years of Capital Markets, I really should do some M &A because it sounded interesting. And Pierre, against all, you know, logic, a lot of people would have said, no, why don't you stay and do Capital Markets? You're doing well. You know all the players. You've done all these deals for so many years. He said, all right, let's do it. And we did this takeover of Rossignol by Quicksilver.

8:09We worked extremely hard. It made me fall in love with M &A because of the creativity. because unlike Capital Markets, where it's really a lot about precedent, there's a documentary piece of it, but it's basically really creative. It's subject to negotiations and the sky is the limit. So I really enjoy that. The collegiality, the creativity of it, it's like a Swiss clock. Everyone in the team has a very particular function and we all work together. And if one aspect of the team or one part of the clock falls down, the whole team can fall apart. I really like that in high stakes. And a couple of weeks ago, after 20 years, I came across Bernard Mariette, the former CEO at Paris' birthday party.

8:48And he was just so great to reminisce. These deals, they forge friendships with your clients because you're in the trenches with them for such a long time, working really hard to reach a common objective. And even though the merger itself, the acquisition didn't quite work out two years later, we actually were hired by Quicksilver. we advised them to sell Rossignol because they were too much debt and for other reasons. It did remain for me very impacting as a transaction, both professionally and the personal relationships I made on it. I like that Swiss clock analogy. And then the relationships you build is really important.

9:24A couple of things that came to mind. One was size of deals. You kind of mentioned this example transaction, like two major brands. Are there any patterns or just lessons learned around the size of transactions? You could do this acquisition merger of equals. You could have a company, maybe it's a billion revenue acquiring a business doing 500 million, which is pretty transformative. And then you got roll-ups doing a series of small acquisitions, tuck-ins and so forth. What have you learned from that? I've been lucky at Scadden. I've been working on major transactions. I can cite to LVMH's acquisition of Tiffany's or Nokia's acquisition of Alcatel, both in the 15 billion euro range.

10:04Last year, we did a combined$11 billion between the takeover of Millicom and the take private of L 'Occitane, being the lead partner on both of them. But one thing I've learned is huge doesn't necessarily mean more complex. Actually, counterintuitively, quite the opposite. In a huge transaction, there's dozens of lawyers involved. Usually you're working with quite sophisticated companies where things fall in order. It's well organized. So there's a lot of coordination, of course, to do. We routinely coordinate teams of 20, 30, 40, 100 lawyers across 10 firms. The two transactions I mentioned to you from last year was the case.

10:43We had teams and teams of lawyers, not just at Skadden, but we had the lead role. But in a way, the smaller acquisitions, they're the ones that present the most challenges because they tend to be especially founder-led enterprises. They have been built in a very organic way. There's less, let's say, discipline in some of them. you encounter much more array of issues that you have to solve. Two of the most complex transactions I've done are probably the two smallest I worked on. I can give you an example. It has to do also with my father. He was a member at Magnum Photos. Magnum Photos is this agency that was founded in the 40s, just after the Second World War by Robert Kappa, Henri Cartier-Bresson.

11:25Those guys are legendary photographers. All the photos you've seen from D-Day, in particular, the Spanish Civil War, et cetera, from those guys. I've been advising them in an informal capacity for many years now. But in 2017, they hired us as a firm to work on an 8 million investment, which sounds simple enough, but because there were unique challenges of protecting the photographer's brand, their artistic process, we had to create a different entity. We had to have the estates or the actual photographers, Elliot Erwitz, Arnold, legendary names, Joseph Koudelka, Martin Parr, legendary names of photography, adhere to a plan, explain to them what this corporate deal was.

12:05It's extremely complex. And the signing was probably the most challenging signing I've had ever because I had to send documents to people. Some of them, I remember one of them wrote an email to me saying, listen, you want my signature on this contract? I'm in Iraq on the front. I'm going to the front now. I might, he knew he might not come back tonight. So is that okay if I can just send you a photo of my signature? Would that be valid for the contract? Of course, you have these types of issues. You have to, is that legally binding? Does it work? When somebody is actually risking their lives, am I really going to insist that no, you should print it somewhere and PDF me a signature?

12:39It was actually very funny because one of the estates, Marilyn Silverstone, she had given the estate to a Buddhist monastery in Nepal. The person basically who was going to sign the contract was a Buddhist nun who would go down the monastery to the local village, had internet connection maybe once every three weeks. I said, okay, please sign and you have to have a witness. You know, it was a British deed. And when the signature came back, the witness was Mathieu Ricard, who's basically the most famous French companion of the Dalai Lama. It's almost if the Dalai Lama had signed as a witness, the agreement, some stories like this.

13:15And I mean, I could go on, you know, so the smaller deals, often they present the most challenges and you have to work around the fact that it's a small size, but it's way more complex than you would expect In a large company, you expect it to be complex and there's a specialist army of people dealing with those issues. It's a larger company, more mature finances and things kept in order, working with the working professionals. Is there a sweet spot? If I say a company is like 100 million EV, is there like a sweet spot in terms of, okay, a 1 million EV company is like buying one of those small businesses, but then you buy another 100 million EV company.

13:49Is there like 20, 30 % of your enterprise value? Is there like a sweet spot you've seen? Can I be frank? Because of Skadden's business model, we don't deal with a lot of these smaller issues. Okay, let's add a zero to it then. And the example I gave you is because this was very special. It was something, so that's why we did it. But I don't know if there's a sweet spot. In a way, every situation ends up being quite unique. I know it's a little cliche to say this. I've learned to not pay too much attention to size. What size does, the difference is the exposure to media and publicity. And there's some form of pressure this way.

14:22We represented Air France in 2009. It was eight and nine. And it's the largest aviation, your civil aviation JV. Air France and KLM, which were our clients, were doing this JV with Delta Northwest. And Delta was acquiring Northwest in the middle of it. So, of course, I remember vividly, we had very little time to negotiate because there was a lot of pressure because of who the clients were. It was valued at$10 billion at the time. So it was one weekend in New York, one weekend in Amsterdam, one weekend in Paris, one weekend in Amsterdam, etc. Very fast-paced to negotiate day and night. Because when we were negotiating the final stages of the agreement, we had all the journalists, all the TV stations, etc.

15:03were waiting in the hotel where the deal was going to be presented. And there was no question we had to sign that agreement by then. So it comes with a kind of pressure. But it doesn't necessarily, I don't think of it as any different. My job is the same. Less about the size. What about strategy? Is there sort of certain strategies, whether you're buying for capabilities, buying for revenue or geographic expansion, anything that you've seen like play out well from all the deals you worked on? Yeah, actually, you see the wide range of why people do M &A. It's either because you work to acquire market shares or geographical footprint, as you said, or very often a technology or some people, especially when you work in tech and IT.

15:45The people and the tech are really essential to what you're doing. In some cases, you're buying a BDA, you're buying profitability, or you might be buying revenue. So you see the full range. And again, it really has nothing to do with the size of the deal. It really has to do with the vision that the buyer may have, entrepreneurs. We work with all kinds of companies. I represent quite a few founders and families. And what I appreciate with them is that more often than not, there is a strategic vision and there's this concern of a transmission across generations. Some of them have built it on their own and want to pass it on to their next generation.

16:20Others have received it from the previous generation and want to grow it to pass something even more stable to the next generation. Definitely, those are really interesting because these are people also in the way that take risks. CAC 40, 14, 500 companies will approach risk in a very different way than a founder or a billionaire or a family office. Interesting. So it is about the strategy, but more about on this vision that you have and executing a strategy against that vision. And then the founder ones can feel a bit more of the personal touch. The relationship, you've worked with clients over years and years.

16:53What is the value of using the same law firm or relationship? You get the sense of like, hey, me as a founder, you sort of established rapport. Maybe even built that friendship. Hey, I like where Kisan's got the big vision and wants to build a billion-dollar business in the next 10 years. But is there things outside of that, of just that relationship that really is accretive for me to continue working with you as we work on a series of acquisitions? When you're lucky in this business, you're not just somebody's lawyer. You end up being what we call the trusted advisor, the conciliary, if we take a godfather analogy.

17:25The idea is someone that you know and trust. Trust is, it's basically our parents in this business is trust. The value of having the same counsel over and over is that your counsel knows you. He or she knows what you want, where your soft spots are, where your hard line in the sand are. After a while with a lot of my clients, I don't have to ask them. I know what they want. They know I will represent them, of course, to the best of my abilities. It becomes this kind of organic situation where when it has to do with M &A, there's a lot of efficiency because I understand their vision. I know what it is they want to accomplish.

18:04I know what kind of risk they're willing to take. You know, as lawyers, we advise, yes, on structures, on strategy. We advise a lot on risk. There is not one way of approaching risk. Our job, I think, is to create options, to tell them, listen, you have three options. Behind door number one, there's something super safe. The cost of reaching it may cost you in terms of money or in terms of the quality of the relationship with the other side or in terms of efficiency. A door B has maybe more risks, but more rewards. And door three is extremely risky, but maybe it has other advantages. You advise them what their options are.

18:39And if they ask you a recommendation, I firmly believe I'm part of the lawyers who believe you have to be able to give a recommendation, but your client is making the decision. The value of a long term, that's why we're in this game, Kisan. I mean, I'll be honest, I'd love a multi-billion deal. But if I don't hear from the client again, I'd rather have a 10 year, as I have 10 year, 15 year, 20 year relationship that we have here at Skadden Paris with clients that have been trusting us over that amount of years because they know we understand them. And basically, at the end of the day, what client wants is they want you to think about them, even by the way, if you don't work with them.

19:15And that's what you bring. And after a while, it branches out into, yeah, some of them, they become your friends, your families know their families. They give you work that have to do with their own family work or personal issues. And it's part of what you do because at the end of the day, I think you want the best result for your clients and you're happy when you get that. And you don't have to get a thank you note, by the way. The satisfaction comes in the job well done. Building trust. Let's talk about cross-border deals. What are the real complexities of doing cross-border deals that no term sheet captures?

19:45So the first thing it captures is the trust. I always tell my clients, you can have the most ironclad contract, whatever. If there is no trust in a relationship, it will be challenging. Yeah, trust relationship with an attorney, but then your counterparty, you have to have a level of trust. Exactly. Trust all around because let's say you're doing a JV, very high stakes, joint venture, a 50-50. This is somebody that's going to be your partner for a number of years. I've been on JVs where the principals fully trusted each other and their vision. and it got done very quickly, even though the terms and conditions, contractual terms were probably not perfect, but they were the best and the most balanced.

20:23And they've had very fruitful collaboration and relationship after years and years of it. And I've been involved in situations where we were doing these JVs and there was no trust and it took us years to just be able to reach an agreement. And basically in an agreement, we were negotiating the conditions of the divorce before we owe much more than we were the conditions of the marriage. And that has to do with trust. So that's a lot of the difficulty. The other one, I would say, is the cultural element of it, the cultural friction. When you work cross-border, multi-jurisdictional, you need to be agile.

20:56You need to respect other jurisdictions that may not have the level of sophistication that yours has. And you have to keep an open mind. That's what makes it more challenging. I'm lucky enough I speak five languages, so I can really relate to a lot of people in their own language. And language is a real barrier to negotiation in a multi-jurisdictional context. If you can speak Spanish or Portuguese, for example, to negotiate a deal with people from that area, it's always a plus. And if anything, it helps create a rapport. It helps create some form of solidarity or connection that you can always rely on because negotiations, it's a lot of psychology.

21:34What we do is a people's business. At the end of the day, you deal with people. As long as we're not dealing with machines, maybe that time will come. We may talk about it later. But as long as you deal with people, the negotiation is extremely psychological and subjective. These fundamentals don't change. Trust, culture, and psychology. I want to unpack that. There's some key things I really want to learn from you today. But the thing that we do see that is outside of those is around regulations and those nuances. I know one of the things we talked about before is global data laws. You have Cloud Act, GDPR.

22:06I'd love to hear about your view on that in terms of how do you manage those aspects when doing these kind of cross-border deals? Yeah, there's everything that has to do with data and GDPR. And then separately, it has to do with regulatory, antitrust, foreign direct investment. I'll start with data and GDPR. So definitely the role that these issues have in M &A deals has been increasing tenfold in the last few years because those regulations were adopted with the advent of technology. Off the bat, what we can see is they're not applied the same way or have the same importance depending on where you are.

22:44Obviously, GDPR was adopted early. And even though a lot of countries are catching up, we were confronted with those a lot more and first in Europe than we were elsewhere. Basically, what happened was it started with some due diligence. We needed to be done on those aspects to such issues as where is that information going? How is it processed? So it's become major, let's say, terms of deals. With Cloud Act, what is interesting is these days, we're spending a lot of time structuring contracts and transactions in a way that deserves basically the data of a client's clients, their own customers, for example, because of the far reach of those regulations, which are extraterritorial by nature.

23:27or Cloud Act means that US authorities can gain access to data that is not stored in the US, not held by US companies, just because there is a nexus with the US. And it could be something as simple as your European company using Gmail. Now you have this connection to Google, which is a US company, a law enforcement or public authority in the US can go to Google and get your data in Europe. So you have to be very cognizant of this and structure in a way that guarantees the safety and protection of your client's data. Definitely something to pay attention of. And if we mention the regulatory, even more so in that space where we can see mushrooming legislations and regulations around the world.

24:13I love to hear that because it sounds like there's like two big components. There's this sort of data regulation, data laws, and then a big piece is just due and diligence, how companies are currently complying and where there may be gaps. And then we have this broader regulatory environment. We talk about competitive, but then there's just general politics and national security and by nature. National security and regulatory are game changers. In terms of the way I can see this evolving in the last 10 years, no need to go further back, certainly 25 years ago, but if anything in the last 10, 12 years have dramatically impacted, I'd say, the way we do M &A.

24:49because let's start with antitrust. We used to have two, three, four jurisdictions where if you wanted to close a deal that had antitrust impacts on the markets in Europe or the US, for example, you had to go and seek an approval or in the US, you just let time go by before you could close your deal. It was what we call a worldwide bar on closing your transaction. You could not close it before you had some form of approval. If it did create that merger consolidation, did create antitrust issues, You had to go through all process of remedies. You knew more or less what to expect. There have been some surprises, but you knew more or less what to expect.