Cleary, Sidley Austin Advise on $16 Billion Bourbon Deal

Japanese brewer and distiller Suntory said Monday it has reached a deal to buy Beam, the maker of bourbon brands such as Jim Beam and Maker’s Mark, in a cash deal worth roughly $16 billion, including the assumption of debt.

The deal is the largest ever for Suntory and is also one of the biggest overseas acquisitions by a Japanese company.

The Osaka-based company, which makes a range of alcoholic beverages that includes Yamazaki whiskey and Premium Malt’s beer, will pay $83.50 in cash for each Beam share, representing a premium of 25 percent over the Deerfield, Ill.–based target’s Friday closing price. The equity value of the deal is $13.6 billion, while Suntory will also assume more than $2 billion in debt. The deal is expected to close in the second quarter of 2014—pending regulatory approvals—at which point Beam’s current management team, including CEO Matt Shattock, will continue to run the business from the company’s U.S. headquarters.

One of the world’s most recognizable producer of alcoholic beverages, Beam was founded in 1904 and later became a subsidiary of Fortune Brands before becoming its own separate company when Fortune split its portfolio in 2011.??In addition to Beam’s namesake bourbon brand, Jim Beam, Suntory will also acquire the Maker’s Mark bourbon brand along with liquor brands Canadian Club whiskey, Courvoisier cognac, Hornitos tequila and Laphroaig scotch whisky. In its announcement, Suntory said the deal would create a global leader in the spirits industry—with combined annual net sales expected to exceed $4.3 billion—while expanding its presence in the United States.

The two companies have a preexisting relationship—Suntory distributes Beam products in Japan, while Beam distributes Suntory products in Singapore and some other Asian markets, and the Japanese buyer has been interested in buying its U.S. counterpart for some time.

Suntory has turned to longtime counsel Cleary Gottlieb Steen & Hamilton for legal advice. The team is led by New York–based M&A partners Paul Shim and Benet O’Reilly. Additional New York lawyers are finance partner Margaret “Meme” Peponis and associate Daniel Fernandez; executive compensation and benefits partner Arthur Kohn, counsel Kathleen Emberger and associate Julia Rozenblit; IP counsel Daniel Ilan and associate Lisa Connolly; and tax partner Jason Factor and senior attorney Jonathan Gifford. Lawyers in Paris, Brussels, Washington, Moscow and Hong Kong are competition partners Mark Nelson and Robbert Snelders, senior attorney Matthew Bachrack, and associates Katia Colitti, Maxim Izvekov, Emma Johansson and Charlotte Emin; M&A associate Jiun Kim; and environmental counsel W. Richard Bidstrup.

Meanwhile, Sidley Austin is representing Beam with regard to the company’s sale. Sidley’s all-Chicago team is comprised of M&A partners Thomas Cole and Beth Flaming, as well as M&A senior counsel Frederick Lowinger.

Kenton Rose serves as Beam’s general counsel.

Debevoise, Cleary and Ropes & Gray Advise on $2.9 Billion Pharma Deal

Specialty pharmaceutical company Forest Laboratories said last week it has agreed to pay $2.9 billion in cash to acquire Aptalis Pharma from its shareholders, including private equity firm TPG.

TPG acquired Aptalis—which specializes in drug treatments for cystic fibrosis and other gastrointestinal disorders—for $1.3 billion in 2007, when the company was called Axcan Pharma. Axcan’s purchase of Eurand four years later resulted in the company changing its name to Aptalis. The company generated $687.9 million in revenues during the last fiscal year.

Reuters reported last summer that TPG was conducting a sale process in which it was seeking more than $3 billion for Birmingham-based Aptalis—a price tag at which several bidders apparently balked. After initially failing to reach a deal, TPG opted for a dual-track process last month by filing for an initial public offering for Aptalis. The IPO was expected to raise up to $500 million, but TPG was ultimately able to strike a deal with Forest before moving forward with the planned offering.

In announcing the deal, Forest said Aptalis complements its own product offerings, and it expects roughly $125 million in annual savings by 2016. New York–based Forest markets a range of drug products, including treatments for gastrointestinal diseases. The acquisition of Aptalis is expected to close in the first half of this year, pending regulatory approval. The deal will be reviewed by antitrust authorities in the U.S. as well as Canada, where Aptalis has some of its operations.

Debevoise & Plimpton is advising Forest on the acquisition, while Cleary Gottlieb Steen & Hamilton is serving as financing counsel to the company. Debevoise’s team is led by New York–based corporate partner Andrew Bab and also includes tax partner Gary Friedman, finance partner Pierre Maugüé, litigation partner Andrew Levine, corporate counsel Judith Church, litigation counsel Kristin Kiehn and IP counsel Carl Riehl.

A. Robert Bailey serves as general counsel for Forest.

Cleary corporate partners Jeffrey Karpf and Margaret “Meme” Peponis are leading the New York–based team advising Forest on financing aspects of the deal, along with associate Anna Kogan.

For its part, Aptalis and TPG have turned to Ropes & Gray. The team includes Boston-based corporate partner William Shields, securities partner Patrick O’Brien, private equity partner Michael Roh, tax partner Loretta Richard, antitrust partner Michael McFalls, securities partner Christopher Green and finance partners Jay Kim and Alexander Zeltser.

Richard Maroun serves as general counsel for Aptalis.