Sunday, 20 December 2009

San Miguel sells foreign beer unit for $300m

Jenniffer B. Austria
Manila Standard

San Miguel Corp., the country’s largest food and beverage company, said it agreed to sell its international beer operations for $300 million to San Miguel Brewery Inc., its venture with Japan’s Kirin Holdings Co.

San Miguel Brewery, 51 percent held by San Miguel and 48 percent owned by Tokyo-based Kirin, said in a statement Friday the debt-funded purchase should be completed the end of January.

San Miguel Brewery and San Miguel Corp. said in separate disclosures to the stock exchange they signed a share purchase agreement for the sale of 100 percent of San Miguel Brewing International Ltd.

The acquisition cost is lesser than San Miguel’s original target. The conglomerate earlier hoped to raise up to $700 million from the sale of its international beer operations.

The acquisition is part of the deal in which Kirin agreed to acquire 43 percent of the domestic beer unit.

San Miguel has been selling assets to pay for bets on energy, water, telecommunications and toll roads that San Miguel president Ramon Ang said in July will give a return on equity that’s almost three times the 7 percent it gets from food and drinks. San Miguel raised about P98 billion earlier this year from the sale of Philippine brewery assets.

“San Miguel can use these proceeds as it diversifies into other industries that have better growth prospects,” said Olan Caperina, who helps manage $9.7 billion at Bank of the Philippine Islands. “It will take two to three years to see if this is the right strategy.”

The acquisition gives San Miguel Brewery, which is focused on the Philippines, access to markets in China and other parts of Southeast Asia. The venture, with brands including Lowenbrau and Stella Artois, has two breweries in China and one each in Indonesia, Hong Kong, Thailand and Vietnam.

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