The Talent

November 21, 2008 5:30 AM

Dealmaker of the Week: S&C's Frank Aquila

Posted by Julie Triedman

3323 To say that Belgian-based brewer InBev SA overcame a few obstacles in its quest to acquire America's largest beermaker, St. Louis, Missouri's Anheuser-Busch, is an understatement.

There were opposing A-B board and family members, statements critical of the deal by union leaders and the governor of St. Louis, online petitions fighting to save the hometown brand, litigation challenges, and then those pesky antitrust obstacles. Oh, and there was the matter of the credit squeeze and the fact that the Belgian company found itself pushing for a close in the midst of the worst financing environment possible.

Undeterred, the maker of Beck's and Stella Artois kept its eyes on the prize. This Tuesday, InBev wrapped up what stands as the largest completed deal this year, its $52 billion purchase of Anheuser-Busch. The new company, Anheuser-Busch InBev, will produce about a quarter of the world's beer and control between 40 and 50 percent of the coveted U.S. beer market.

While a couple hundred lawyers and investment bankers had a part in this accomplishment--InBev alone drew on the services of at least six law firms and 23 banks--one dealmaker stands out from the rest in his tenacity and creativity in getting the deal done--InBev lead M&A lawyer Frank Aquila of Sullivan & Cromwell.

InBev's chief legal officer, Sabine Chalmers, reached out to Aquila to lead the deal team earlier this year. Chalmers knew Aquila well from his work for consumer goods company Diageo, her previous employer. Aquila led Diageo's M&A team on several matters, including its sale of Burger King Corporation to an investor group led by Texas Pacific Group in 2002 and its acquisition of The Chalone Wine Group in late 2004.

News of InBev's impending bid for A-B was leaked to the media in May; from that point on, the deal was a hot one. Still, one issue that has been a major dealbreaker in recent months was taken off the table early on: the financing. InBev, at Aquila's and the investment bankers' urging, made it a priority to "lock up and load" the money from the start.

"People were thinking about the failure of the United Rentals deal, they were thinking about Clear Channel," recalls Aquila. By July, when InBev made its second formal bid, it had nailed down commitments from 23 separate banks. The company utilized the U.K.'s so-called certain funds financing structure, which places far fewer conditions on loans than typical U.S. financing rules do. The financing "was constructed to withstand whatever would come," one person involved in negotiations told the Financial Times. The 23 banks "funded right on time. I think that means something."

That structure conveyed a level of seriousness on InBev's part, say deal participants. And without the worry that a deal might face financing crosswinds down the pike, Anheuser's board was able to evaluate the transaction on the basis of value alone.

Aquila, quarterbacking a roughly 90-lawyer S&C team, "has superior judgment on the high-level issues, and a real command of the details of complex execution," says Antonio Weiss, a vice chair at Lazard Europe. Weiss worked alongside Aquila as InBev's lead investment banker.

At a time when one-third of U.S. deals announced in 2008 have been withdrawn or failed to close, according to data from UBS AG, InBev's success is particularly noteworthy.

"To actually get it done in this environment was amazing," Aquila told The Am Law Daily on Tuesday.

We agree. And we wonder, after more than nine months on the matter, did the legal team let loose on Tuesday and throw back a few cold ones?

"We had a few celebratory Buds," Aquila says. And after a short break, he says, it was right back to work.

Dealmaker of the Week is published Fridays in The Am Law Daily.

Verizon's John Thorne, 11/7/08

George Kahale and Eric Gilioli of Curtis, Mallet-Prevost, 10/31/08

Gilbert + Tobin's Gina Cass-Gottlieb, 10/24/08

Davis Polk's Diane Kerr, 10/17/08

Slaughter and May's Nigel Boardman,10/10/08

S&C's Mitchell Eitel,10/3/08

Munger Tolles's Robert Denham,9/26/08

S&C's H. Rodgin Cohen, 9/19/08

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