The Work

December 2, 2010 1:35 PM

Four Firms Tapped for $3.8 Billion Pepsi Russia Deal

Posted by Brian Baxter

PepsiCo has announced that it will acquire a two-thirds stake in Moscow-based dairy and beverage company Wimm-Bill-Dann for $3.8 billion in cash. The deal is one of the largest deals by an American company in Russia, according to The New York Times.

The move by Purchase, N.Y.-based Pepsi, the world's second-largest soft drink maker after archrival Coca-Cola, follows the completion of Coke's acquisition of Russian juice maker Nidan earlier this year. The deal also takes place in the wake of revelations by Wikileaks showing Western diplomats likening Russia to a "mafia state" beset by corruption and organized crime.

George "Gar" Bason, Jr., the head of the M&A practice at Davis Polk & Wardwell in New York, led a team from the firm advising Pepsi on the deal. The American Lawyer named Bason one of its Dealmakers of the Year in 2009 for his work representing Citigroup. (Bason was also named an Am Law Dealmaker of the Week in January 2009 for advising Citigroup on a joint venture agreement with Morgan Stanley.)

Bason and Davis Polk have enjoyed a close relationship with Pepsi in recent years. He led a team from the firm advising Pepsi in April 2009 when it made a $6 billion cash-and-stock offer for control of its two biggest bottlers, PepsiAmericas and Pepsi Bottling Group, eventually upping the offer to $7.8 billion to complete the transaction later that summer.

Rounding out the Davis Polk team working on the Wimm-Bill-Dann deal are corporate partners Peter Douglas and John Banes, tax head Avishai Shachar, antitrust partner Ronan Harty and counsel Michael Sohn, employee benefits partner Edmond FitzGerald, and corporate counsel Erika White.

The deal is structured so that Pepsi will purchase 66 percent of Wimm-Bill-Dann from eight shareholders and two subsidiaries of the Russian company. Tender offers in Russia differ from those in the U.S. in that the target is not technically part of the deal. Instead the buyer and the shareholders of a target negotiate the conditions themselves. (Pepsi's 8-K and purchase agreement spell out more of the transactional details.)

Completion of the deal requires Russian regulatory approval, which is expected to take between two and four months. Should the deal be approved, Russian law calls for Pepsi to buy up Wimm-Bill-Dann's remaining shares, which would push the total transaction value to $5.8 billion.

John Goodwin, the managing partner of Linklaters's Moscow office, is serving as Russian corporate counsel to Pepsi along with corporate partner Denis Uvarov, banking partner Dmitry Suschev, and capital markets partner Jasper Evans. Igor Panshensky, a corporate and antitrust partner in Dechert's Moscow office, is serving as regulatory counsel to Pepsi in Russia.

Pepsi's general counsel is Larry Thompson, a former King & Spalding partner who served as deputy attorney general at the Justice Department from 2001 until 2003. While at Main Justice, Thompson led the department's national security coordination council. Deputy general counsel Thomas Tamoney served as Pepsi's lead in-house lawyer on the Wimm-Bill-Dann deal.

Christopher Allen, a corporate partner in the Moscow office of Latham & Watkins, led a team from the firm advising Wimm-Bill-Dann. Capital markets cochair Alexander Cohen in Washington, D.C., and global M&A cochair M. Adel Aslani-Far in New York are assisting Allen on the acquisition. The firm has previously represented the company on corporate matters.

Roman Bolotovskiy serves as the head of Wimm-Bill-Dann's in-house legal department.

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