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Master Of The M&A Universe


Legal Affairs: DEALMAKERS

MASTER OF THE M&A UNIVERSE

Stephen Volk has taken Shearman & Sterling to the top

The phone call arrived at midnight on Friday, Jan. 31, just as Stephen R. Volk was preparing to go to sleep. On the line was Morgan Stanley & Co. General Counsel Jonathan M. Clark, who alerted the corporate lawyer that the investment bank's landmark merger with retail broker Dean Witter, Discover & Co. was on--and had to be sewn up as fast as humanly possible. The reason for the rush: rampant rumors that Morgan Stanley was cooking up a deal with PaineWebber Inc. While the buzz was wrong, reporters were sniffing around furiously to see if anything was up.

That was bad news. A similar merger effort between Morgan Stanley and English brokerage firm S.G. Warburg Group PLC in 1994 unraveled in part because news leaked out before the paperwork was signed. On Saturday, the 60-year-old senior partner at New York's Shearman & Sterling began a night-and-day workathon. He sealed the deal at 6 a.m. Wednesday morning--a performance worthy of Carl Lewis.

It was vintage Volk. As the merger boom of the mid-1990s surges ahead, Volk is emerging as the legal profession's new Master of the Universe. Just as Skadden, Arps, Slate, Meagher & Flom's combative Joseph H. Flom was the archetypal corporate lawyer of the 1980s, when deals were frequently hostile and heavily litigated, the wry, understated Volk is more in tune with the synergistic 1990s. A cum laude graduate of Harvard Law School, he is renowned for his ability to untangle knotty legal issues, navigate massive egos, and close difficult deals. "He is really a great adviser," says John F. Welch, chairman of General Electric Co., who turned to Volk when subsidiary NBC acquired Financial News Network in 1991. "He listens better than anybody else [and] cuts to the chase very quickly."

Under the leadership of Volk, Shearman's M&A practice has finally caught up to Skadden and other 1980s New York powerhouses, such as Wachtell, Lipton, Rosen & Katz and Simpson Thacher & Bartlett. The firm played key roles in the two biggest U.S. deals of last year: representing British Telecommunications in its $21 billion combination with MCI Communications, and Bell Atlantic in its $21 billion marriage with Nynex. Shearman also participated in last year's biggest merger outside the U.S., counseling Sandoz in its $30 billion pairing with Ciba-Geigy. Worldwide, the firm handled 108 big deals in 1996--three more than second-place Skadden, according to Securities Data Co. In worldwide dollar volume, Shearman came in third.

CUSTOM FIT. Volk built his reputation by his performance in deals such as Seagram Co.'s acquisition of 80% of MCA from Matsushita Electric Industrial. Because of tensions between owner Matsushita and MCA Chairman Lew R. Wasserman, Seagram couldn't gain access to MCA's internal paperwork until after the deal was signed. That worried Seagram President Edgar Bronfman Jr., whose senior executive vice-president, Stephen E. Banner, was too ill to help, and whose longtime outside law firm was recused from participating because of a conflict. According to participants on both sides of the table, Volk played an indispensible role in helping Bronfman address his concerns by devising an innovative contract provision that allowed Seagram to perform its due diligence after the paperwork was completed and back out if anything was seriously amiss.

Volk's conquest of the M&A world is all the more impressive given Shearman's history. Like many of New York's blue-blood firms, it disdained the confrontational and litigious M&A practice when Volk arrived in 1960. "I remember my senior partner once saying: `Gentlemen don't sue gentlemen,"' he recalls. That attitude is long gone these days--and you can bet Shearman & Sterling's partners are happy that Volk helped bury it.By Mike France in New YorkReturn to top

TABLE

Volk's Greatest Hits

Shearman & Sterling partner Steve Volk has built an M&A department that has

participated in some of the biggest deals of the 1990s

MORGAN STANLEY

DEAN WITTER, DISCOVER 1997

SANDOZ CIBA-GEIGY 1996

BRITISH TELECOMMUNICATIONS MCI 1996

BELL ATLANTIC NYNEX 1996

SEAGRAM MCA 1995

PHARMACIA UPJOHN 1995

VIACOM PARAMOUNT 1994

AMERICAN CYANAMID AMERICAN

HOME PRODUCTS 1994

DATA: SECURITIES DATA CO.; SHEARMAN & STERLING

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