Covington & Burling, Debevoise & Plimpton, Jones Day, Skadden, Arps, Slate, Meagher & Flom and Willkie Farr & Gallagher have all nabbed roles on a pair of deals announced this week that sees two of Bermuda’s largest companies expand their global reach.
Headquartered in historic Hamilton, beverage giant Bacardi Ltd. announced on Monday that it would purchase Patrón Spirits International AG in a deal valuing the premium Mexican tequila brand at $5.1 billion. That same day, American International Group Inc. (AIG) also announced a deal to buy Bermuda-based reinsurer Validus Holdings Ltd. for $5.56 billion in cash.
Debevoise, a longtime legal adviser to New York-based AIG, is handling matters for the insurance giant related to its proposed acquisition of Validus, which is being advised by Skadden. Willkie has picked up a role counseling investment firm Perella Weinberg Partners LP in its role as financial adviser to AIG on the transaction.
Covington is advising Bacardi on its bid for Patrón, while the latter has looked to Jones Day to represent it on the transaction, the exact terms of which were not disclosed. The deal is expected to close in the first half of 2018.
Founded in Santiago de Cuba in 1862, Bacardi was originally known for its eponymous white rum. Since then, the company has grown into one of the world’s largest privately-held spirit companies, boasting a portfolio that includes Bombay Sapphire gin, Cazadores tequila, Dewar’s Scotch Whisky and Grey Goose vodka. (Bacardi, which like many companies with Cuban roots was caught up in the country’s decades-long schism with the United States, has fought a long litigation battle over the disputed Havana Club rum trademark.)
Bacardi had already owned a 30 percent stake in Patrón, but with its bid to take full control of the Mexican company, the acquirer plans on growing its U.S. operations where demand for high-end tequila has grown exponentially. Last year, London-based global spirits giant Diageo plc bought Casamigos, a tequila company started by actor George Clooney and two other business partners for $1 billion.
Covington has a long history with Bacardi. George “Chip” Reid Jr., a former partner at the firm who died in 2003, became the first non-member of the Bacardi family to serve as its CEO in 1997, a role he held until early 2000. Before that, Reid served as an executive vice president at Bacardi and helped negotiate the company’s 1993 acquisition of Martini & Rossi.
Since then, Covington has taken on other major roles for Bacardi, including its 2002 purchase of Cazadores. On its acquisition of Patrón, Covington corporate partners Douglas Gibson and Peter Zern are leading a team from the firm that includes tax partners Daniel Luchsinger, Emin Toro and Ed McClellan, employee benefits partner Michael Francese, anti-corruption practice co-chair Donald Ridings Jr., real estate partner Heather Haberl, antitrust partners Miranda Cole and James Dean, debt finance special counsel Alexander Clarke and intellectual property special counsel Adrian Perry.
Jones Day global M&A chair Robert Profusek and M&A partner Randi Lesnick are leading another outside legal team from the firm representing Patrón. Patron’s in-house legal team is also made up of several former Jones Day lawyers, including the company’s current chief legal officer and general counsel Shawn Harpen and its senior corporate counsel Angele Motlagh.
As for AIG, which nine years after its big federal government bailout successfully shed its “too big to fail” designation in September (the same month it hired Lucy Fato as its new general counsel), the insurance giant has now clinched its largest acquisition since 2008 through its purchase of Hamilton-based Validus.
Over the last decade, AIG has pulled off a series of divestitures in order to pay back the $182 billion in debt it incurred as a result of its bailout by U.S. taxpayers. AIG completed its repayment in 2012. Debevoise has advised AIG on many of its post-financial crisis deals, including the proposed $35.5 billion sale in 2010 of Hong Kong-based life insurance unit AIA to U.K. insurer Prudential plc. When that deal ultimately fell through, Debevoise helped AIG raise $20.5 billion through an initial public offering for AIA.
Debevoise financial institutions group co-chair John Vasily, who took the lead on the IPO for AIA, is once again heading up a team from the firm advising AIG on its acquisition of Validus. Other Debevoise lawyers working on the matter include insurance partner David Grosgold, corporate chair Jeffrey Rosen, global tax co-chair Peter Schuur and partners Paul Rodel, Elizabeth Pagel Serebransky and James Scoville.
With its acquisition of Validus, AIG re-enters the Lloyd’s insurance market and adds to AIG’s reinsurance market offerings at a time when the company is facing price pressures.
Skadden, which previously advised Validus on its $690 million purchase of Western World Insurance Group Inc. in 2014, is once again representing the company on its sale to AIG.
Todd Freed, co-head of Skadden’s financial institutions group, and financial institutions partner Jon Hlafter are leading a team from the firm working on the deal that also includes tax partner Jessica Hough, executive compensation and benefits partner Neil Leff and IP and technology counsel James Talbot. Robert Kuzloski serves as general counsel for Validus.
Gregory Astrachan, co-chair of the capital markets practice at Willkie in New York, is working with corporate and financial services partner Laura Delanoy in counseling Perella Weinberg in its role as financial adviser to AIG.