Philippines: San Miguel files application to sell 20% of merged business

San Miguel Corporation (SMC) revealed plans to sell 20% of recently restructured food and drinks business to meet regulatory requirements. In a notice to the Disclosure Department of the Philippine Stock Exchange (PSE), SMC stated: "We advise that, at the regular meeting of the board of directors of San Miguel Corporation held today, August 9, 2018, the board of directors of the corporation approved the sale of up to 1.2bn common shares of San Miguel Food and Beverages Inc. (SMFB) through a public offering.”

In 2008 SMC started a major restructuring program and added infrastructure, mining, petroleum, and power assets to its staple food and beverage businesses. The aim was to bolster revenues and to make the business less dependent on one sector of the industry.

As a consequence, SMC sold in 2009 48.304% of the issued and outstanding shares of its subsidiary San Miguel Brewery (SMB) to Kirin Holdings Company from Japan. SMB acquired from SMC one year later also 100% of San Miguel Brewing International (SMBIL), a company with brewing operation in Hong Kong and China.

Last year San Miguel announced plans to combine its San Miguel Pure Foods, San Miguel Brewery and Ginebera San Miguel businesses in a new unit called San Miguel Food & Beverages. (, 7.11.2017). In January, San Miguel revealed that it had received shareholder approval for the plans but the company needed to broaden its ownership structure to achieve regulatory approval due to public ownership rules in the Philippines. In April, San Miguel announced to sell between 20% to 30% of San Miguel Food and Beverage in the fourth quarter. The company said at that time to hope to raise as much as $3.6 billion in what could be the country’s biggest share sale on record. (, 10.4.2018)

The proceeds will be used to fund a major expansion program. San Miguel Corp. and its beer unit San Miguel Brewery (SMB) are planning to build 10 new breweries with an annual capacity of 1-2 million hectoliters each in the next two years. Each brewery will cost at least $100 million, summing up to a total investment of least $1 billion, said San Miguel Chief Finance Officer Ferdinand K. Constantino in an interview. One of the breweries will be built on the West coast of the United States (, 1.6.2017) to target the 4 million Filipino Americans, which are estimated to live in the US. (, 18.7.2018)

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