Leading international law firm Herbert Smith Freehills has advised long-standing client Inchcape plc (Inchcape), the leading independent global automotive distributor, on the sale of its UK retail operations to a wholly-owned subsidiary of Group 1 Automotive, a Fortune 300 automotive retailer, for a cash consideration of approximately £346 million.
Following completion of the transaction, it is intended that £100 million of the proceeds will be returned to Inchcape shareholders by means of a share buyback programme which is expected to be completed within 12 months.
The transaction is conditional only upon regulatory approval from the Financial Conduct Authority in relation to the change of control of the UK Retail operations’ regulated entity and is expected to complete during Q3 2024.
The disposal of the UK Retail operations (comprising over 80 sites in the UK with 12 OEM partners) will complete Inchcape’s transformation into a substantially pure-play distribution business. This is in fulfilment of Inchcape’s strategic decision to focus on its higher margin, capital-light, high returns, cash generative global Distribution business.
Herbert Smith Freehills has a deep track-record of advising Inchcape on this strategic journey since 2016 – including advising on the disposals of certain of its retail sites and businesses in China, Australia, and Russia, the sale of its UK fleet services business, and on expanding its distribution footprint in Indonesia and Latin America – particularly through the Simpson Motors acquisition in the Caribbean and its £1.3 billion business combination to acquire Derco, the largest independent automotive distributor in Latin America.
A cross-practice Herbert Smith Freehills team was led by Client Relationship Partner Roddy Martin and associate Meera Thakrar, who advised Inchcape’s Group General Counsel, Mike Bowers. They were supported by associates Yusra Jafar and Toby Goodman. The wider team included partner Casey Dalton and senior associate James Tryfonos on tax, partner Natalia Rodriguez on competition, partners Sam Brown, Paul Ellerman and Tim Leaver on employment, pensions and incentives, partner Clive Cunningham on FSR, partner Kristen Roberts on finance, senior associate Hugh Bannister on TMT, of counsel Kathryn Oie on real estate, senior associate Julie Goulbourne on EHS and senior associate Angela Chow on data protection.
Roddy Martin commented: “We are delighted to continue to play our part in Inchcape’s exciting transformation, supporting its Accelerate strategy and its focus on, and growth in, its global automotive distribution footprint. The deal demonstrates our ability to draw upon the expertise of a wide range of practice areas and work hand-in-hand with Inchcape to help execute on its strategy at a fast-pace.”
