Asahi reaches $220m settlement over Independent

Japanese beer giant Asahi claimed two private equity companies inflated the earnings of Independent Liquor. Photo / Thinkstock

Japanese brewing giant Asahi has dropped legal claims against two private equity companies after reaching a $220 million out-of-court settlement in relation to alleged losses incurred from its acquisition of New Zealand's Independent Liquor.

The Tokyo-based firm acquired Independent from Australia's Pacific Equity Partners (PEP) and Unitas Capital for $1.5 billion in September 2011.

In February last year two Asahi subsidiaries - Independent Liquor NZ and Asahi Holdings Australia - launched proceedings in the Federal Court of Australia in Melbourne against the two private equity firms.

Asahi alleged that PEP and Unitas engaged in "misleading and deceptive conduct" by making false representations of Independent's financial position, in particular by inflating its earnings before interest, tax, depreciation and amortisation (ebitda) figures.

The Japanese firm was seeking damages from PEP and Unitas "for loss suffered as a result of their conduct in breach of Australian Consumer Law".

Asahi also added a claim against the two private equity companies' insurers in May this year.

Today, Asahi said it had dropped the claims after receiving $220 million from the respondents to the lawsuit.

Asahi Holdings Australia wrote down the carrying value of Independent Liquor by A$464 million in its financial statements for the year to December 31, 2012.

The company said it expected to report "extraordinary income" in its current financial year as a result of the settlement.

But the brewer would not alter forecasts provided in August because it intended to begin "asset streamlining measures" ahead of schedule.