Guinness plc Merger

The firm advised Guinness plc on a lengthy negotiation that enabled its £24 billion merger with Grand Metropolitan, owner of Pillsbury, Burger King, and International Distillers and Vintners.

Guinness' 21% shareholder and international distribution joint venture partner, LVMH--Louis Vuitton Moet Hennessy, the world's largest luxury goods firm--announced its opposition to the proposed merger with Grand Metropolitan and said it would seek to block the merger unless the transaction was substantially restructured in favor of LVMH. LVMH purchased roughly 10% of the common stock of Grand Metropolitan and began arbitration aimed at buying the distribution joint venture at a distressed price.

We advised Guinness' senior management in its lengthy negotiations with LVMH, which finally reached agreement. Upon the announcement of success in finally negotiating this agreement, the combined market capitalization of Guinness and Grand Metropolitan--now known as Diageo plc--increased by £3 billion.

  • Lax Sebenius were a source of clear-headed counsel, focus and objectivity during a long and intense period of difficult negotiations and conflict. Their excellent advice helped us avoid numerous pitfalls and guided us toward actions that we might not have taken otherwise. Their advice complemented and helped us frame the input we received from our top legal and merchant banking advisors. As advisors, they told us what they thought we needed to hear rather than what they thought we wanted to hear. Their advice contributed significantly to the ability of our company to successfully complete negotiations that created billions of pounds of value for Guinness and Grand Metropolitan shareholders.
    Kenneth Mildwaters
    Group General Counsel, Guinness plc and Diageo plc