Magic Circle Firms Advise on Asahi's $11B Acquisition of AB InBev's Australia Business

Allen & Overy and Freshfields are advising long-term clients Asahi and AB InBev, respectively.

July 25, 2019 at 02:05 PM

3 minute read

Two Magic Circle firms – Allen & Overy and Freshfields Bruckhaus Deringer – are advising on Japanese brewer Asahi Group Holdings Ltd.'s $11.3 billion acquisition of the Australia business of Belgian beer giant Anheuser-Busch InBev SA/NV. The move is part of ABInBev's effort to reduce the mountain of debt it accumulated when it acquired SABMiller for $107 billion in 2016.

Asahi is acquiring all of Melbourne-based CUB Pty. Ltd., AB InBev's Australia subsidiary. The Tokyo Stock Exchange-listed company will raise up to $1.9 billion with a share offering to fund the deal, Asahi said in a statement. The transaction is expected to close by the first quarter of next year, pending approvals from the Australian Competition and Consumer Commission and Australia's Foreign Investment Review Board. The deal, if it goes through, will see AB InBev exit the Australian market.

Allen & Overy corporate partners Aaron Kenavan in Sydney and Matthew Appleton and Richard Hough in London are advising long-term client Asahi. They are supported by Sydney partner Peter McDonald on competition and regulatory issues, and London partner Jim Ford on intellectual property and information technology matters.

Freshfields corporate partners Bruce Embley and Alison Smith in London are representing regular client AB InBev. They are supported by: tax partners Helen Lethaby and Murray Clayson, IP partner Giles Pratt, employment partner Alice Greenwell and finance partner Martin Hutchings, all in London; competition partners Helmut Bergmann in Berlin and Thomas Janssens in Brussels; and corporate partners Vincent Macq in Brussels and Omar Pringle in New York.

Gilbert + Tobin corporate partner Neil Pathak in Melbourne is serving as Australian counsel to AB InBev.

The proposed acquisition comes just a week after AB InBev suddenly scrapped a share sale in Hong Kong of a minority stake in its Asian business, which could have raised as much as $9.8 billion, making it the largest IPO of the year. Sullivan & Cromwell and Freshfields were advising the issuer, Budweiser Brewing Co. APAC Ltd., while Clifford Chance was representing J.P. Morgan and Morgan Stanley as the joint sponsors. The company cited "several factors, including prevailing market conditions", for scuttling the IPO.

The sale of CUB will be used to pay down debt, AB InBev said in a statement. The beer giant has been trying to reduce a $102.5 billion debt pile accumulated following the 2016 takeover of U.K. rival SABMiller Plc. for $107 billion.

Meanwhile, the deal for AB InBev's Australia business is the latest overseas acquisition by Asahi. Earlier this year, the Japanese brewery bought the premium beer business of London-based pub operator and brewer Fuller, Smith & Turner Plc. for $327 million. Hogan Lovells advised Asahi, while Freshfields represented Fuller.

And in 2016, Asahi paid a total of about $11 billion in two separate deals to acquire AB InBev's eastern Europe business as well as two European beer brands from SABMiller. Allen & Overy's Hough advised Asahi and Freshfields' Embley represented AB InBev on both deals; Hogan Lovells and Linklaters advised SABMiller.