Japanese brewer Asahi has recouped about one-sixth of the AU$1.2 billion it paid for Kiwi company Independent Liquor after reaching a settlement with Pacific Equity Partners, Unitas Capital and their insurers, which include AIG New Zealand.

The AU$199 million settlement is reported to be one of the largest commercial damages cases in Australia and New Zealand, according to the Sydney Morning Herald.

The brewer sought AU$700 million from Pacific Equity Partners and Unitas last year, after alleging the private equity firms had lied about the profitability of Independent Liquor, forcing it to pay too much.
PEP and Unitas denied the claim saying any loss suffered was due to Asahi’s failure during due diligence.

But as the hearing was due to commence last month, Asahi reached an agreement with the private equity firms to settle the case, the Sydney Morning Herald reported last week.

As well as undermining confidence in commercial contracts and forcing vendors to be more cautious about earnings forecasts and representations to buyers, experts said it could also lead to higher directors’ liability insurance premiums.

It is understood that three warranty and indemnity insurers – AIG Insurance New Zealand, Beazley Solutions and Allied World Assurance – have agreed to pay about AU$138 million of the settlement with PEP and Unitas paying the balance.

A spokesman for AIG New Zealand declined to comment citing client confidentiality.