Lovells’ mainstream corporate practice has been given a much-needed boost after scooping its largest deal of the year.
The City firm, which is attempting to win more public M&A work, is advising longstanding client SABMiller on its $8bn (£4.57bn) merger with South America’s second-largest brewer Bavaria, part of the Santo Domingo Group (SDG).
Lovells has acted as SABMiller’s lead UK counsel since the late 1990s, having advised legacy company South African Breweries on its London Stock Exchange listing in March 1999 and its subsequent acquisition of Miller Brewing Company from Philip Morris.
Meanwhile, last May the firm advised SABMiller on the purchase of the Shaw Wallace Group’s 50 per cent interest in the brewing operations of SABMiller’s Indian joint venture Mysore.
SABMiller has agreed to acquire a 71.8 per cent stake in Bavaria and will issue 225 million shares to the value of $3.5bn (£2bn), which will give SDG a 15.1 per cent holding in SABMiller.
Lovells needed to set up a special purpose vehicle called Racetrack for SABMiller in order to complete the merger because Bavaria consists of separate listed companies in Colombia, Ecuador, Panama and Peru, which in turn are owned by SDG’s holding company Bevco. The actual merger will take place between Racetrack and Bevco.
According to reports, SABMiller outbid rival Heineken to win the race to acquire Bavaria.
The Lovells team was led by London M&A partners John Davidson and Andrew Pearson, with London-based tax partner Daniel Friel and New York tax partner Julie Reynolds also working on the deal. Davis Polk & Wardwell served as US counsel to SABMiller.
Simpson Thacher & Bartlett, led by David Williams and Alan Klein, acted for Bavaria. Herbert Smith corporate partners James Palmer and Greg Mulley provided Bavaria with UK law advice.
The acquisition is expected to close within the next three months.