SMC to buy out Japanese partner in package unit

MANILA, Philippines - San Miguel Corp. (SMC) will be buying out its Japanese partner in its packaging venture and acquire a stake in another packaging company, a move in preparation for its packaging unit’s initial share sale. SMC signed a Share Sale and Purchase Agreement (SPA) with its joint venture partner Rengo Co. Ltd. of Japan for the buy out of Rengo's interest in San Miguel Rengo Packaging Corp. for P250 million, the company told the Philippine Stock Exchange (PSE). The transaction will represent 30 percent of San Miguel Rengo and will pave the way for San Miguel to secure sole ownership over the company, sources said. The company will also be purchasing a 6.7 percent interest of Macondray Fibreboard Corp. in Mindanao Corrugated Fibreboard Inc. for P27.1 million, SMC said. The target closing date for the transaction is 10 business days from signing of the SPA. San Miguel originally planned the initial share sale of San Miguel Packaging Specialists Inc. last year. However, the global financial turmoil has led a number of companies, including SMC, to defer their maiden offering. San Miguel Packaging Specialists Inc. is a partnership between the Filipino company and the Nihon Yamamura Glass Co. Ltd., considered as Japan’s foremost glass packaging manufacturer. SMC controls 65 percent of San Miguel Packaging Specialists Inc. after Yamamura purchased a 35 percent stake. The acquisition is expected to create “synergies" for San Miguel Packaging, Nikka Maloles, analyst at online stock brokerage 2TradeAsia, said "I think one way to look at it is to look for the strength of San Miguel Packaging and since the Japanese are known for their packaging expertise, the latest acquisition could further help San Miguel Packaging," Maloles said. Shares of SMC “A" – which can only be bought and traded by Filipinos –rose P1.50 to P52.50 apiece during Wednesday’s trading at the PSE. Similarly, shares of SMC “B" which has no such ownership restrictions rose P1.50 to P53.50 during the same trading day. - GMANews.TV