The 2021 award for the best financial transaction of 2020 Established in 1973 as a “forum for discussion between chief financial officers who sometimes find themselves dealing with various challenges alone”, the Club des Trente is “a sharing circle in which people can talk about the economic situation, trends and underlying issues”, explains Sophie Stabile, the Club’s Chairwoman and CFO of Lagardère. “The ‘Prix du Club des Trente’ rewards innovation and the creation of shareholder value in the long term,” she explains.
“The award was introduced 21 years ago, based on the realisation there was no benchmark for the quality of financial transactions,” says Jérôme Michiels, Chairman of the Jury and CFO of Wendel. “We first call for entries from the investment banks that advise on deals. We receive a lot, which the Club reviews before making a shortlist. We then invite the relevant companies to present their transactions. After these ‘final oral presentations’, we select the winning transaction.”
“2020 was marked by the Covid crisis but we received a lot of entries nonetheless. All of these deals had been announced before the Covid crisis and were carried out despite the unprecedented circumstances. They were really interesting, complex transactions that were seen through successfully,” adds Mr Michiels.
The Grand Prix du Club des Trente, which is awarded for the year’s top financial transaction, was given to Stellantis, the company formed by the merger between PSA and FCA.
Carlos Tavares, CEO of Stellantis: “This was a team effort. I accept this award on behalf of all Stellantis employees. It means a lot. We came through a really difficult period in 2020… It is inspiring to see such a driven leadership team overcome the challenges related to Covid. In the space of 13 months, we filed 12,500 documents pages of official documents with bodies around the globe. The final negotiations were the most difficult. I am really touched and really proud of what my teams achieved. Their resilience is a shining example for the whole Stellantis galaxy.”
“Employee diversity at Stellantis, which was formed through a two-part merger (between Chrysler and Fiat then between FCA and PSA), is one of the company’s defining features,” says Mr Tavares. “As for the Stellantis culture, we will talk about that again in a few years, once we have charted the way forward to build it,” he insists.” We need to give free rein to all of this diversity and embrace the sense of self-deprecation needed to work together while enjoying what we do. In a few years, I think we will have a performancebased culture… We will take the time needed to get there.”
As for managing so many brands, “there’s really no secret to it,” he smiles. “First of all, we have a real passion for these brands and a real sense of responsibility with regard to their history. I am not here to kill off brands. I want to give them every chance for a fresh start, to propel them forward into the future. That is what drives me on a daily basis… Each of these brands will receive funding over the next 10 years to help them grow. As long as the company continues to produce consistent results, we will provide this funding. It is up to the brand CEOs to use their vision to pursue profitable growth for their brand.”
“This was a deal we couldn’t miss,” says Hervé Elias, CEO of Mazars, one of the original Club des Trente partners. “It created a leading global player that still has really strong French roots. It was a remarkably well executed deal at an extremely difficult time, which was hugely complex in terms of execution, competition law and financing.”
The Stellantis deal also received the Grand Prix du Public. “This was a new addition in 2021. The award is based on votes from students – most of whom specialise in finance – and the people who use our website,” explains Ms Stabile. As for the best merger, sale or acquisition, “the award went to a leading name in French industry that has become the number-two worldwide in its sector while remaining based in France,” hints Mr Elias. “It was a fantastic turnaround for a company which – just two years ago – was on the verge of a major deal that fell through, mainly due to antitrust issues. Plus, this was a project carried out during the Covid crisis. The transaction got underway in February 2020, just before the start of the pandemic. It was completed in January 2021, which proves there was a real industrial strategy in place to keep the deal afloat. We were impressed by the biggest capital increase since 2016, which was the main methodof financing the deal to maintain all financial ratios. As you have probably guessed, I am talking about Alstom’s acquisition of Bombardier Transportation.”
“After an initial attempt with Siemens, which was blocked by the European Commission, we successfully completed the deal to acquire Bombardier Transportation, which doubled our size,” says Marc Granger, Chief Strategy Officer at Alstom. “We are now the second-largest in the world, just behind a Chinese firm that mainly operates in its home market. This transaction makes us a global leader in several respects. The first is our unparalleled geographic reach. We are present on every continent, both commercially and industrially. Proximity to our customers as one of the keys to our success. With this acquisition, we now offer an extremely wide range of products and services. We were already a pioneer in green mobility solutions… Today, we have everything it takes to lead the way in transforming the world and in transforming transportation around the globe,” he explains. “The deal was mainly financed through a rights issue, with a significant share of the proceeds going to Alstom’s long-standing shareholders. It also gave a stake to CDPQ, Bombardier Transportation’s established shareholder. Having them on board is indicative of strong ambition.”
Lastly, the award for the best financing transaction went to Schneider Electric, represented by its CFO, Hilary Maxson, which issued the world’s first sustainability-linked convertible bond.
“The financing award was given to a company that set up an atypical, exceptional and often innovative method of financing,” says Ms Stabile.
“The company has shown a real sign of confidence in its long-term sustainable development strategy,” says Ariane Bucaille, a partner at Deloitte, which is also a Club des Trente partner.
“This award gives us another reason to improve in terms of our ESG targets, which have long been part of our culture and our core identity,” says Ms Maxson. “Our managers’ performance-related pay has long been linked to ESG targets. Since 2005, we have been setting increasingly ambitious goals. The ESG targets introduced through this bond are part of the Schneider Sustainability Impact strategy we presented to shareholders on the eve of the issue, during the ESG Investor Day on November 16th 2020.” Ms Maxon insists the transaction “required a lot of preparation ahead of time, notably with finance, strategy and sustainable development teams, as well as banks”.
“Our congratulations to Schneider Electric on this transaction, which is a world-first and reflects a real sea change. We cannot picture finance today without ESG and sustainability. However, this will demand careful consideration on the part of the regulator and auditors to compile indicators that can be checked, understood and used by the whole industry. That is a real challenge,” insists Mr Michiels.
Every year, “we have the pleasure of taking a deep dive into some 30 transactions on the Paris market that we are already familiar with but which we look at from a different angle”, says Mr Elias. There are no doubt some similarities between the two winning M&A deals in 2021: “We gave awards to two companies that showed a lot of resilience. They both hit difficulties at some point but were able to bounce back and become global leaders,” says the Mazars CEO.