Corrs advises Foster's on sale of wine clubs and services business

26 April 2007

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Corrs Chambers Westgarth has advised Foster's Group Limited (Foster’s) on the sale of the Australian and New Zealand component of its Wine Clubs and Services Business to funds managed or advised by Australian private equity firm, Archer Capital. This includes the sale of Cellarmaster Wines and Vinpac International in Australia, Cardmember Wines and Carters in New Zealand and an investment in Wine Buzz in Japan.

Over the past twelve months Corrs has worked closely with Foster's to develop a structure to separate the business operations of its Wine Clubs and Services Business, which were heavily intertwined with Foster's core operations, and to document the ongoing relationship between Foster's and the business so there was a discrete business to sell.

Simon Morris, who led the Corrs project team working on the deal said "this was a substantial effort; there are now some 24 separate agreements documenting the relationship, many of them involving companies incorporated in different jurisdictions and subject to different laws. A Corrs lawyer has also been seconded to Foster's for the sole purpose of working on the separation of the IT contracts between the two businesses."

Simon adds “it was a genuine thrill to lead such a committed team who collaborated seamlessly to complete the transaction. In addition to our corporate team the project utilised the expertise of our IP, IT, litigation, workplace relations, property, taxation, competition and finance teams. The successful completion of this complex deal can be attributed to the dedication, commitment and strong working relationships of both the Corrs and Foster's teams."

“Foster’s is one of Australia’s great companies, a market leader in many sectors and for us as advisers it is always a great compliment to assist their management in implementing new transactions and strategies. Corrs has a long and deep history in advising Foster’s on its business needs. In this transaction that history came to the fore as we were able to anticipate potential difficulties and propose solutions based on our knowledge of the business and experience of previous transactions.”

"It's a great result for Foster's, which has now completed its transformation from a diversified portfolio of businesses to a leading integrated global drinks producer."

Corrs has worked closely with Foster’s on this transformation, including the sale of Foster’s Leisure & Hospitality business in 2003, the Lensworth land development business in 2004, and more recently advising on a series of significant overseas divestments, including the sale of the Foster's Brand in Europe to Scottish & Newcastle and the sale of breweries in India, Vietnam and China to SABMiller, APB and Suntory respectively, which generated net proceeds of more than A$1 billion.

The core project team working with Simon Morris on sale of the Wine Clubs and Services Business were Vanessa Smith, Kristy Parsons, James Morley, and Justin Fox. The core team were assisted by lawyers across all our work groups including, Phil Catania, Matthew Craven, Breen Creighton, David Smith, Ben Davidson, Stewart Grieve, Dixon Hearder, Stephen Kroker, Roy Weitzman, Fran Wheelahan, Rhys Jewell, Scott Millar, Fiona McGauchie, Ben Cas, Danny Nemer, Som Leung, Sheree Siow, Anna White, Kristy Parsons, Chris Taylor, Sara Georgandas, Brooke Lanarus, Faisal Mian, Norah Wright and Tony Mohorovic.