Blake Dawson Waldron advised Scottish & Newcastle (S&N) on the Australian aspects of its $750 million acquisition of the Foster’s brand in Europe from Australian company Foster’s Group Limited, represented by Corrs Chambers Westgarth.
Linklaters advised S&N and Herbert Smith advised Fosters on the European aspects.
The two companies previously had an agreement whereby S&N had held a licence to Foster’s European brand since 1995. However, the licence fee was not relative to volume sold or other targets and left the companies in a situation where S&N had little incentive to develop the brand, and Foster’s had no incentive to promote it in Europe.
However, Foster’s was providing global promotion through event sponsorships, without financial reimbursement. “The arrangement didn’t actually make commercial sense,” David Williamson, Blakes’ lead partner on the transaction, said.
The outcome of the brand acquisition is, in that sense, a win for both companies. The price paid by S&N was well above that which the market expected Foster’s to be able to demand, and S&N has attained outright ownership of the Foster’s brand in its most significant markets. Foster’s retains ownership of the brand outside Europe.
Williamson said an interesting feature of the deal was ensuring that brand integrity was maintained and there was consistent brand promotion in global markets. He said a brand protocol had been established and would be administered by Foster’s.
Adrian Wong, a senior associate who co-led the Blakes team with Williamson, said it was unusual to see co-ownership of such an iconic Australian brand.
The deal has been signed but is subject to regulatory clearance by the Treasurer, Peter Costello, under the Foreign Acquisitions and Takeovers Act.
The Blakes team also included tax partners Duncan Baxter and Geoff Mann, intellectual property partner Peter Chalk, corporate senior associate Julian Chenoweth and lawyer Carla Alviano. Jeremy Davis led the Corrs team.
Herbert Smith’s team was led by corporate partner Gareth Roberts and Nick Gardner, and Linklaters was led by Matthew Middleditch and Roland Mallinson.