- Created: Thursday, 27 October 2016 10:10
While Grupo FerroAtlántica instructs some of the world’s biggest law firms, it also uses smaller firms as they are sometimes ‘more competitive and efficient’, says Carla Inés Cerdán Molina
In December last year, Spanish firm Grupo FerroAtlántica, a manufacturer of ferroalloy used in a wide range of industries – including automotive, electronics, healthcare products and solar panels – merged with US-based, Nasdaq-listed silicon manufacturer Globe Specialty Metals. The all-share deal created Ferroglobe PLC, a London-based company, valued at around €2.7 million, that produces approximately 15 per cent of the world’s silicon metals supply.
The resulting company’s global manufacturing and export business means it operates in multiple jurisdictions, which presents new challenges to the company’s in-house legal department. Consequently, the Madrid-based legal team at FerroAtlántica, which remains the majority shareholder in the new company, is on a steep learning curve as it tackles a number of complicated issues, according to the company’s general counsel and secretary of the board, Carla Inés Cerdán Molina. Consequently, FerroAtlántica often needs to instruct major firms to provide advice on potential acquisitions in new jurisdictions, for example. The company invites multiple firms to tender for work and bases its selection on factors such as efficiency and competitiveness.
“The last year and a half has been extremely interesting with the merger process and we have faced enormous challenges,” she says. Among the issues the legal team has faced has been the cultural differences between the Spanish and the American company, as well as the coming together of two different regulatory frameworks, explains Cerdán Molina. In addition, the legal department has also faced the challenge of integrating two companies to create a new entity, which is English.
“We have become an English company, Ferroglobe, but the majority shareholder continues to be Grupo Villar Mir, the Spanish owners of FerroAtlántica, with 57 per cent,” Cerdán Molina says. She adds that this has led to a complete shift in terms of both compliance and legal regulation, with the company now subject to British and American jurisdictions. In addition to trading on Nasdaq, the company is subject to legislation in the 15 other jurisdictions in which it operates.
“This means that our legal focus has changed completely,” Cerdán Molina explains. “We have gone from the Spanish jurisdiction where we were an absolute authority on the legal framework within which the company operates, to a situation which requires compliance in Spain, in the UK and in the US.” She adds: “Our operations have become inter-jurisdictional, and the challenge is now even greater, but at the same time much more interesting.”
FerroAtlántica’s Spanish headquarters’ in-house legal department comprises two lawyers. “The department is intentionally small,” says Cerdán Molina. “We prefer to use the know-how of local lawyers in the jurisdiction in which a case is taking place, as a law firm in a specific jurisdiction will contribute much more than if we were to have a large legal team here in Spain attempting to cover each region.”
Cerdán Molina adds that attempting to stretch the Madrid-based legal team’s resources to cover global operations would risk the effectiveness of the company’s day-to-day operations, she explains. “We have to choose whether to deal with legal issues in-house from beginning to end, or whether to hire an external law firm, depending on the nature of the case, its technical complexity and the time it may take to execute,” Cerdán Molina says. “We need to ensure a specialised and efficient process in order to prioritise the company’s operations and not cause delays – if we know that a case is likely to be long and tedious, for example, we will immediately outsource it.”
Cerdán Molina says the company uses a variety of law firms of all sizes – with firms being chosen on the basis of their competence in a given field and the competitiveness of their fees. Among the firms used are Clifford Chance, Uría Menéndez, Linklaters, Freshfields, Garrigues and Baker & Mackenzie. “But we also use smaller firms that can sometimes be more competitive and efficient, and we use Legal Trade, for example, for labour issues,” Cerdán Molina adds. She says that, for each matter, the company approaches at least two firms and request proposals, before choosing the most competitive offer. With the company actively seeking acquisition opportunities in other countries, Cerdán Molina says it will always look to hire a firm on the ground in the country where the planned transaction will take place in order to benefit from the relevant know-how.
Carla Inés Cerdán Molina is general counsel at Grupo FerroAtlántica