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GE keeps the fixes coming for ‘deal junkie’ Victoria Lazar

January 18, 2019

Negotiations between General Electric and Baker Hughes were hush-hush in 2016. The circle of those in the know was small, and everyone was sworn to secrecy. Both sides feared that the terms of the transaction — $7.4 billion combining two mega-oil field service companies employing 70,000 and generating $23 billion in annual revenue — would become public and potentially kill the deal.

Houston litigator-turned-corporate deal-maker Victoria Lazar was one of the lawyers in the know.

“There was a lot of excitement about this deal because it was transformational in the marketplace,” says Lazar, who is executive counsel for mergers and acquisitions for General Electric. “The Halliburton-Baker Hughes deal collapsed in May, and our M&A team went right to work, often until 2 or 3 in the morning, to get the deal done before word leaked out.”

GE announced the merger of Baker Hughes and GE Oil and Gas on Halloween day in 2016, but Lazar’s mission was just starting.

“In most transactions, not much happens between the announcement and the closing,” Lazar told The Texas Lawbook in a series of exclusive interviews. “That was definitely not the situation in this merger. We worked day and night because this deal needed a lot of structural focus to make the operation work properly.”

GE gave Lazar the monumental task of integrating the legal operations of the two conglomerates. By all accounts, it was one of the most complex and creatively structured transactions ever devised in the oil patch, and its implementation was executed seamlessly.

“The transaction involved several complex steps that had to be accomplished in a short period of time, to effect and execute the complex structure,” Shira Yosher, a shareholder in the Houston office of Greenburg Traurig, wrote in nominating Lazar for the award. “Victoria deserves significant recognition for the success of this landmark deal.”

The Texas General Counsel Forum agreed and recently honored Lazar with its prestigious 2018 Magna Stella Award for a Major Corporate Transaction.

High-stakes thrills

Lawyers who know Lazar say she thrives on the thrills and adrenaline of fast-paced, high-stakes deal-making.

“I admit, I’m a deal junkie,” she says. “They are brutal on the work hours. I have a very patient, understanding and forgiving family.”

Lazar declines to discuss specifics of her current M&A projects other than she is working on GE’s plans to reposition its portfolio. Many media outlets reported last month that GE has filed the required paperwork to divest or spin out its $19 billion healthcare unit through an initial public offering.

“I am helping GE reposition its portfolio to de-lever the company and streamline its holdings to create a simpler, industrially-focused company,” she says. “I am also helping other asset sales the company is putting together both in the U.S. and overseas.”

Hitler and communism

Lazar’s parents were Jews from Romania who survived Hitler and communism. Her father was a civil engineer who spoke nine languages. Her mother, now 92, has a degree in chemistry and speaks five languages.

“My father needed a job, and he went to communist leaders and told them that he could help them translate Russian documents for them, so they hired him right away,” she says. “The thing was, my dad didn’t know any Russian, but he taught himself Russian very quickly. That says a lot about my dad.”

In the 1950s, the Romanian government reached an economic agreement in which Jews were paid to move to Israel. Lazar’s parents were in this program and relocated in 1960. The couple lived in Israel for about 18 months and then obtained visas to go to Canada. Lazar was born in Montreal, where she lived until she was 6.

In 1971, the family moved to Houston, where Lazar’s father took a position teaching civil engineering at the University of Houston and her mother worked in a research laboratory at Baylor University. They eventually founded a residential building business and worked together.

In high school, Lazar joined the debate team and became its president.

“I was painfully, brutally shy,” she says. “My debate coach deserves the credit. Debate gave me confidence to speak up in public.”

Lazar’s parents wanted her to go to Rice University and become a doctor. Instead, she chose Cornell University and majored in political science. During her junior year, she worked at the U.S. Commerce Department’s Office of Soviet Affairs.

No five-year plan

Even at that point, Lazar says she had no idea what she wanted to do with her life.

“Many things in my life and career have just happened because they were the right fit,” she says.

Law school was one. And she excelled. Baker Botts made her an offer in its Houston office in 1990. Lazar started practicing tax law, shifted for a couple years to litigation and finally ended up doing M&A deal work.

“I realized that I always wanted to be a transactional lawyer working internationally, and I was finally headed in that direction,” she says.

‘Big brain’

Jennifer Smith, a partner in the Houston office of Hogan Lovells, has known Lazar for 28 years. They took the bar exam together, joined Baker Botts at the same time and still play tennis and travel together.

“Even back then, it was clear that Victoria had a ‘big brain.’ She set herself apart from others right away,” Smith says. “Victoria is a steady voice of reason, even in times of crisis.

During this time, Lazar started working for a very large firm client — Ross Perot’s Electronic Data Systems of Dallas. She was involved in nearly every cross-border merger or acquisition involving EDS over a two-year period, including the purchase of a consulting firm that spanned 25 countries and EDS’ split from General Motors. She also worked on a pipeline deal across Azerbaijan for a separate client.

In 1996, EDS hired Lazar in its corporate legal department. During the dozen years that followed, she was involved in some of the biggest and most important legal and business decisions at EDS. She led nearly a dozen major M&A deals in Russia, Israel, Brazil, Canada, Germany, Belgium and France. She led key domestic transactions that helped the company as it experienced financial difficulties. In the process, she became an expert on governance issues for the EDS board of directors.

When Hewlett-Packard bought EDS for $13.9 billion in 2008, Lazar received a call from an executive recruiter about an opening in the General Electric legal department, and she agreed to become senior counsel for GE Oil and Gas and its drilling and production systems.

“I thought EDS was a large company, but I had no idea what it really meant to work in a large legal department until I joined GE,” she says.

GE had about 900 lawyers in its corporate legal department, according to a 2016 report.

The Texas General Counsel, in honoring Lazar, points out that she led GE’s “most acquisitive division in the business, and several of its most prolific regions, selling highly engineered products and service solutions to oil and gas industrial companies, in some of the most challenging sociopolitical and geographic environments.”

New area of expertise

In 2010, GE needed Lazar to become the company’s expert on evaluating and managing enterprise risks involving GE’s sale and servicing of offshore deep-water drilling equipment, including blowout preventers.

The precipitating factor, of course, was the Deepwater Horizon disaster on April 20, 2010, at the BP-operated Macondo prospect.

“I had to develop a deep expertise on some highly technical products, including these huge, five-story megaton pieces of equipment that can close a well underground,” she says. “Everyone, including GE, gained new appreciation for the risk inherent in these activities, and it was up to us to work through them.”

“It was a scary time for everyone in this sector because we saw what was happening to BP,” she says. “GE is big, but BP was big, too.”

Lazar says the lack of regulation was an important element to face. She and GE worked with federal regulators to understand the drilling process and how the equipment worked.

“As a result, we developed a very strong professional relationship with regulators because they could see that we were truly committed to safety, quality and protection of the environment,” she says.

GE and Baker Hughes

Then came the summer of 2016. Halliburton and Baker Hughes announced that they were ending their efforts to merge amid challenges from the DOJ that it violated federal antitrust laws.

Within days, GE executives and lawyers started working on a plan for its subsidiary, GE Oil and Gas, to purchase Baker Hughes. Lazar was in the thick of it.

“We went from signing to closing in eight months,” she says. “We needed to carve the oil and gas operation out of big GE, and set up combined businesses to work together day one with no disruptions. We needed to close while learning to work together, retaining people and not losing any ground to competitors.”

Lazar and GE’s legal team restructured GE Oil and Gas into an arms-length corporate structure that allowed GE to continue to provide services to the new operation during the transition but also permitted it to combine with the various legal entities for Baker Hughes and fulfill its requirements as a new public company.

The new Baker Hughes, a GE company, as structured, would be traded on the New York Stock Exchange, which meant that the deal needed Baker Hughes shareholder approval and all offering documents needed to be prepared and approved by the U.S. Securities and Exchange Commission.

Lazar says it was strategically important to “build in as much optionality as possible” into the new entity’s structure.

“We prepared for integration, but also for separation, if that’s how things went,” she says.

The optionality proved necessary. GE announced in November that it reached an agreement to start selling its 62.5 percent ownership stake in the publicly traded Baker Hughes over the next six months.

“The goal was to make it as seamless as positive for the business-side folks,” she says. “My best days on the job are when I help the client solve a problem that helps them be more successful.”

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