HSF advises bank on $3.3bn sale of ownership stakes

Herbert Smith Freehills (HSF) has advised the Commonwealth Bank of Australia (CBA) on the sale of its ownership stakes in Colonial First State (CFS) to global investment firm KKR.

CBA has a 55% stake in CFS, and HSF said that the deal “implies a total valuation for CFS on a 100% basis of $3.3bn, with CBA receiving cash consideration of approximately $1.7bn.”

The firm also said that the sale is “part of CBA’s ongoing strategy to focus on its core banking business.”

CFS is presently the administrator of about $135bn worth of funds, and CBA intends to work together with KKR to implement an investment program that will boost CFS’s position in Australia’s retail superannuation and investment market.

“I am delighted that the team at Herbert Smith Freehills has supported CBA in another milestone transaction. This transaction involved an array of challenges and high intensity, in a time of sweeping change amidst the COVID-19 pandemic,” said Tony Damian, HSF partner and co-chair of the firm’s global banks sector group.

On this transaction, Damian and fellow partner Nicole Pedler led a large multidisciplinary team composed of lawyers from various practice groups in the HSF’s Sydney branch. The team included partner Clayton James and senior associate Li-Lian Yeo from the private equity group; partner Rob Bileckij, senior associates, Jayne Walker and William Hickey and solicitor Jennifer Xue from the corporate practice; partner Kwok Tang and senior associate Kirk Boladeras from the IT group; IP special counsel Amalia Stone; funds and financial services consultant Ruth Stringer; as well as partner Erin Wakelin and executive counsel Amelia Fleming from the finance practice.

Greenwoods & Herbert Smith Freehills partners Andrew Hirst and Ryan Leslie led a team that advised on the tax aspects of the deal.

HSF also coordinated with CBA’s M&A legal team, which was headed by Mark Alexander, the general manager of treasury, corporate and technology legal. He was supported by core team members Kelly Head, Will House and Michael Ting.

In 2019, HSF had advised CBA on the $4.2bn sale of First Sentier Investors (formerly Colonial First State Global Asset Management) to Mitsubishi UFJ Trust and Banking Corporation. In the same year, the firm also advised CBA on the $3.8bn deal involving a joint cooperation agreement with AIA Australia on the divestment of CommInsure Life. Damian led HSF’s team in both transactions.