DEAL NEWS: The world's second largest tobacco group, British American Tobacco, have engaged Herbert Smith, Hiswara Bunjamin & Tandjung, and White & Case on its acquisition of a major stake in Indonesian cigarette producer, PT Bentoel Internasional Investama for US$494m.
White & Case Asia-based partners William Krischner, Barrye Wall and Jeremy Leifer acted as sole international counsel for Bentoel's owners, Rajawali Group. Herbert Smith and its Indonesian associated firm, Hiswara, acted for longstanding clients British American Tobacco. The Herbert team was headed by Austin Sweeney, Andrew Radford, Liam Barker and Clare Lynch in Singapore together with David Dawborn, Brian Scott, Iril Hiswara, John Nagulendran and Jeanne Elisabeth in Jakarta.
Industry analysts said that the transaction is significant as western cigarette manufacturers are increasingly facing crackdowns at home. Indonesia is the world's fifth largest tobacco market by volume and generates sales of around 250 billion cigarettes a year. Last year Bentoel was the fourth largest cigarette maker in Indonesia, gaining approximately a 7% market share.
White & Case advised Rajawali on the sale of their 56% stake to BAT. The firm previously represented Rajawali on a number of other deals such as the sale of its 15.97% interest in PT Excelcomindo Pratama Tbk to Emirates Telecommunications Corporation, and its acquisition of a 24.9% stake in Indonesian cement company PT Semen Gresik.
A public tender offer for the remaining shares of Bentoel is yet to be announced and is expected to be completed by the end of August 2009.