Herbert Smith Freehills has guided London-based vehicle distributor Inchcape’s £1.3 billion acquisition of Derco, the largest independent automotive distributor in Latin America, while White & Case advised the seller.
Derco is headquartered in Santiago, Chile, and is controlled by the Del Río family. The company sells vehicles by carmakers such as Suzuki, Mazda and Renault in Chile, Peru, Colombia and Bolivia.
Roddy Martin, the client relationship partner on the transaction at Herbert Smith Freehills, noted that the deal is one of several that his firm has been able to assist Inchcape with recently. Herbert Smith Freehills also advised Inchcape on its entry into the Caribbean market, and on its exit from Russia.
“We are pleased to continue to assist them in executing on their M&A ambitions globally,” Roddy said in a statement.
The investment in South America comes at a complicated moment for the region, as several leftist presidents have been elected across the Andes on promises of taxing the rich and transforming their countries.
Some wealthy families from the Andes have been selling strategic businesses and parking assets offshore, in places like Miami.
The sale, subject to approval by Inchcape shareholders and local regulators in South America, will give the Del Río family 9.3% of Inchcape’s shares and entitle them to nominate one director to the company’s board.
The South American law firms that advised Inchcape on local law matters were Claro in Chile, Brigard Urrutia in Colombia, PPO in Bolivia, and Rodrigo Elías & Medrano in Peru.
White & Case partner David Lewis, who led his firm’s team on the deal, said the transaction “demonstrates our top-tier capabilities on complex cross-border deals involving London listed entities.”
In addition to the team at White & Case, lawyers from Chilean firm Barros & Errázuriz advised the Del Río family on the sale. Chile-based lawyers at Spanish heavyweight firm Garrigues advised the family on tax matters.