A key addition to Deutsche Bank's banking team helped it join relationship banks J.P. Morgan and Morgan Stanley as leads on a $1.7 billion financing package backing Coors' acquisition of three beer brands from Interbrew. Tim Wolf, senior v.p. and cfo of Coors, said David Jacobs' jump from Morgan Stanley to Deutsche Bank in June sealed the deal for the German bank. "There was no prior relationship with Deutsche Bank, but Coors thought highly of them, and when David Jacobs moved over from Morgan Stanley," Deutsche Bank got the nod, Wolf said. Jacobs, a managing director and head of global consumer investment banking, had been head of the European food and beverages practice at Morgan Stanley.
Despite losing Jacobs, Morgan Stanley still has a place on the roster, after advising Coors on the transaction. The firm did "a wonderful job on an offering last year," Wolf commented. He added that Coors has had a great relationship with J.P. Morgan for the last five years. The global capacity and ability to beat a short timeframe were strong factors, he added. The deal, in which Coors will acquire Carling, Grolsch and Caffrey's, is expected to close by early February, he noted. Bank of America was among a group of competitors that bid for the business, Wolf said, declining to name the others. J.P. Morgan and Deutsche Bank are both powerful investment and commercial banks, he said, citing that strength as another reason for the choice of the lenders. He said he'd reserve judgment on their syndication prowess until the deal is complete.
J.P. Morgan and Deutsche Bank are currently syndicating the $1.7 billion bridge loan, which will be taken out, probably in March, with a permanent bank debt and bond package to be led by the three banks. Wolf said it is still being decided how much of the debt will be split between Europe and the U.S. The brewer is looking at $700-750 million in bonds, with the remainder in bank debt, including term loans. "My team are working on this right now, putting the documentation together," he added, "and an equity analyst meeting on Feb. 28 will precede the roadshows." The company carries a BBB+ rating. Pricing is still being determined, while the spread on the bridge could not be ascertained.