Legal details of Kwik-Fit deal emerge

Legal firm Berwin Leighton Paisner (BLP) advised the management of Kwik-Fit on the well-known tyre retailer’s sale to Japanese conglomerate, Itochu Corporation, it emerged today. Nice to know, you might think, but what does this tell about the deal itself? According to the company, BLP fielded a cross-practice team to provide corporate finance, real estate, private equity, employee share schemes and tax advice – and this implies that that all these aspects have been involved in negotiations and ultimately the deal itself.

The fact that the BLP team, led by Peter Robinson, assisted by Manu Chopra and Hari Guliani, covered all these areas might seem an obvious move in a deal this size, but it has not always been so. Look back at the history of tyre retail sales and there are a line of loop-hole legends relating to property rent-backs and preferential supply details.

Comments by BLP Partner Peter Robinson were also revealing: “Having acted on the acquisition in 2005, we are delighted to have assisted the management of Kwik-Fit on this disposal. It was a significant deal involving input from teams in the UK, France and Holland which was completed in a very short timeframe following selection of the successful bidder.”

The fact the deal moved very quickly is also worth highlighting. Speaking off the record, a number of sources tell of how the deal was surprise to those very close to the transaction. This was said to have both been because the deal was closed at a rate of knots (just a few days) after the selection of the successful suitor, but also because the management went to some length to conceal the identity of the would-be bidders.

Kwik-Fit is being sold to Itochu by private equity firm PAI Partners subject to regulatory approval by the European Competition authorities. While BLP advised Kwik-Fit. Baker & McKenzie advised buyers Itochu Corporation and Dickson Minto advised sellers PAI Partners.

Prior to the Kwik-Fit deal, BLP advised China-based Pacific Century Motors (PCM) on what it called “the single largest Chinese investment in the global automotive supplier industry.” The law firm advised PCM on the international merger control aspects of its acquisition of steering systems manufacturer, Nexteer Automotive, from General Motors. This deal was hailed by the Wall Street Journal as “one of the landmark deals of the era.”

The Brussels-based team was led by EU & competition partner Dave Anderson, and assisted by associates Paul Johnson and Annabel Baxter. Woody Zhou, the transaction-project leader for PCM said “We are grateful to the BLP Brussels antitrust team for their excellent advice and hard work throughout this successful deal.”  

Commenting on the deal, Dave said “We are delighted to have worked so successfully with PCM and MCPS on this ground-breaking international transaction for China. BLP’s competition team is very experienced in handling complex multijurisdictional merger control cases, and we are pleased to have brought that experience to bear on behalf of PCM in securing the European clearances needed to get this important deal to closing.

Related news:

• Itochu’s Kwik-Fit and Stapleton’s to be run as separate entities

• Kwik-Fit confirms Itochu is new owner

• Report: Itochu Buys Kwik-Fit for £637 million