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A bevy of large law firms stand to reap some of the $261 million in legal fees incurred by Anheuser-Busch InBev SA/NV and SABMiller plc as a result of their $106 billion beer industry megamerger.
The windfall comes a month after the U.S. Department of Justice cleared the union between AB InBev and SABMiller, with some conditions. Total professional advisory fees from the landmark transaction are nearing $2 billion, according to various news reports and a scheme document provided by SABMiller to shareholders, and law firms are poised to collect $261 million—or about 13 percent—of that amount.
With total fees for advisers—such as banks, public relations professionals and at least a dozen law firms—have already reached roughly $1.94 billion. More specifically, AB InBev will pay $185 million to its legal advisers, while SABMiller will pay $76 million. Shareholder records do not delineate fees for specific firms, although the $261 million total has been called a record for an M&A transaction.
As previously reported by The Am Law Daily, AB InBev turned to an outside legal team led by Freshfields Bruckhaus Deringer, Cravath, Swaine & Moore and Sullivan & Cromwell, while Clifford Chance advised controlling shareholders in Brussels-based AB InBev. SABMiller turned to Linklaters and Hogan Lovells, while Simpson Thacher & Bartlett and Wachtell, Lipton, Rosen & Katz advised shareholders in the London-based beverage giant.
As lead legal adviser to acquirer AB InBev, Freshfields is poised to snag the lion’s share of the M&A legal advisory fees, according to sibling publication Legal Week. Sabine Chalmers serves as chief legal and corporate affairs officer for AB InBev, while John Davidson and Stephen Shapiro serve as general counsel and deputy general counsel, respectively, for SABMiller. Davidson is poised to step down from the combined company next year and will reportedly be joined by up to 35 other in-house legal staffers employed by SABMiller.
Records on file with the U.S. Senate reveal that AB InBev has paid additional sums over the past few months to several Am Law 200 firms that have lobbied on antitrust and regulatory aspects of its union with SABMiller. Among those firms receiving payments from the fourth quarter of 2015 through the second quarter of this year are Akin Gump Strauss Hauer & Feld ($110,000); Brownstein Hyatt Farber Schreck ($190,000); Covington & Burling ($60,000); and Troutman Sanders ($20,000).
In other M&A news…
Pfizer Inc./Medivation Inc./AstraZeneca plc
Four months after Pfizer’s $160 billion bid to acquire Allegan plc in a tax inversion deal was scuttled due to new U.S. regulations, the New York-based company agreed to acquire cancer drug maker Medivation in an all-cash deal valued at $14 billion. Pfizer’s deal for Medivation—announced Aug. 22 and expected to close by the fourth quarter of 2016—will see the biopharmaceutical giant pick up the target’s premier drug Xtandi, which is used to treat prostate cancer. Just two days later, Pfizer inked another billion-dollar deal to buy AstraZeneca’s small molecule antibiotics business. Pfizer will pay $550 million at closing—expected in the fourth quarter—but the transaction’s value could reach nearly $1.6 billion after taking into account development rights and milestone payments.
Legal Advisers: Ropes & Gray for Pfizer on the Medivation and AstraZeneca deals; Cooley and Wachtell for Pfizer on the Medivation transaction; Davis Polk & Wardwell for J.P. Morgan Securities as financial adviser to Medivation; Greenberg Traurig Maher for AstraZeneca.
Liberty Media Corp./Formula One
While an official deal has yet to be confirmed, recent media reports claim that U.S. cable magnate John Malone’s Liberty Media is in talks to acquire Formula One from London-based private equity firm CVC Capital Partners for roughly $8.5 billion. U.K. publication Legal Business reported a week ago on the big firms behind the would-be pairing.
Legal Advisers: Baker Botts for Liberty Media; Freshfields for CVC.
Alimentation Couche-Tard Inc./CST Brands Inc.
Canadian gas station giant Couche-Tard—behind the famed Circle K convenience store brand—has agreed to acquire San Antonio-based CST Brands in an all-cash deal valued at $4.4 billion, including debt. The transaction, expected to close in early 2017, will see Circle K set up a new unit in San Antonio and combine two big companies in the convenience store and fuel retail sectors, as noted by sibling publication Texas Lawyer.
Legal Advisers: Faegre Baker Daniels and Davies Ward Phillips & Vineberg for Couche-Tard; Wachtell and Stikeman Elliott for CST.
Apollo Global Management LLC/Searchlight Capital LP/Rackspace Hosting Inc.
Buyout behemoth Apollo has agreed to scoop up San Antonio-based cloud company Rackspace in an all-cash deal valued at $4.3 billion. The deal, announced Aug. 26 and expected to close in the fourth quarter of this year, will see New York-based private investment firm Searchlight Capital make an equity investment in Rackspace.
Legal Advisers: Paul, Weiss, Rifkind, Wharton & Garrison for Apollo; Wachtell for Searchlight Capital; Wilson Sonsini Goodrich & Rosati for Rackspace.
Zhongwang USA/Aleris Corp.
Zhongwang USA LLC—controlled by Chinese billionaire Liu Zhongtian—has agreed to acquire Cleveland-based aluminum products manufacturer Aleris from an investment group owned by Oaktree Capital Group LLC in an all-cash deal valued at $2.33 billion, including debt. Announced Monday, the deal is expected to close in the first quarter of next year, according to Legal Week.
Legal Advisers: Freshfields Bruckhaus Deringer for Zhongwang; Fried, Frank, Harris, Shriver & Jacobson for Aleris; Paul Weiss for Oaktree Capital.
PDC Energy Inc./Kimmeridge Energy Management Co.
Denver-based oil and natural gas company PDC is poised to purchase two privately held companies managed by New York-based private equity firm Kimmeridge in a cash-and-stock deal valued at $1.5 billion. Announced on Aug. 23 and expected to close in the fourth quarter, the deal will see PDC scoop up 57,000 net acres in West Texas.
Legal Advisers: Davis Graham & Stubbs for PDC; Sidley Austin for the sellers.
Genesys Telecommunications Laboratories Inc./Interactive Intelligence Group Inc.
San Francisco-based call center software company Genesys has agreed to buy Indianapolis-based rival Interactive Intelligence for $1.4 billion in cash. Last month, private equity firm Hellman & Friedman LLC invested $900 million in Genesys, which boasts a client list that includes PayPal Holdings Inc. The current deal, announced Wednesday, is expected to close by the end of the year.
Legal Advisers: Fried Frank for Genesys; Faegre Baker Daniels for Interactive Intelligence.
Cinven Group Ltd./Water Street Healthcare Partners LLC/JLL Partners Inc.
European private equity giant Cinven has agreed to acquire Doylestown, Pennsylvania-based clinical trials company BioClinica Inc. from Water Street Healthcare Partners and JLL Partners. While financial terms of the deal—announced Aug. 22 and expected to close in the fourth quarter—were not disclosed, The Wall Street Journal reported the value at $1.4 billion, including debt.
Legal Advisers: Kirkland for Cinven; Skadden, Arps, Slate, Meagher & Flom for BioClinica and its equity holders.