San Miguel sells beer assets as it pursues new businesses

MANILA, Philippines - San Miguel Corp. has sold its beer assets to subsidiary San Miguel Brewery, Inc. as part of its plan to become a holding company with diversified interests. In a disclosure, San Miguel Corp. said its board of directors had approved the sale of its domestic beer brands and related intellectual property rights to San Miguel Brewery for P32 billion. The holding company also sold part of the lands used in the beer operations to SMB Retirement Plan for P239 million and the rest to the beer unit for P6.8 billion. "The foregoing transactions will be implemented after obtaining the required approvals from the appropriate regulatory authorities," San Miguel Corp. said. San Miguel Brewery is the largest producer of beer in the country with a total market share of approximately 93%. Among its beer brands are the flagship San Miguel Pale Pilsen, Red Horse, San Mig Light, and Gold Eagle. Formerly a division of San Miguel Corp., San Miguel Brewery was spun off last October 1, 2007, a move which the mother firm said was intended to realize the value of San Miguel Corp.’s flagship business, and became public in May 12, 2008. Emmanuel P. Soller of Equitiworld, Inc. said the transfer of the beer operations to San Miguel Brewery would allow the holding company to focus on its diversification plans. "Without the beer operations under it, San Miguel Corp. would be able to concentrate on its plans and their growth. It is now a full-fledged holding company," he said. James Lago of PCCI Securities, Corp. said "There are still beer-related assets in San Miguel Corp. and it had to transfer all these when it carved out the brewery." Since it first disclosed its plan to diversify two years ago, San Miguel Corp. has been aggressive in acquiring new non-food and beverage businesses. It bought the Government Service Insurance System’s 27% stake in Manila Electric Co. last October for P26 billion and is in the process of purchasing a majority stake in Petron Corp., the country’s largest oil refiner, for P32.2 billion. San Miguel is also planning a domestic telecommunications venture with a Qatari firm and is looking into a possible alliance with Indonesia’s PT Bumi Resources. Earlier this month, Japan’s Kirin Holdings Co. Ltd. said it was interested in acquiring 43.2% of San Miguel Brewery, leaving San Miguel Corp. with a 51% stake. Shares of San Miguel Brewery, Inc. Wednesday went up by 1.01% or 10 centavos to P10 per share. San Miguel Corp. A shares, exclusive to locals, did not move at P40 apiece while its B shares, open to all investors, shed 1.2% or 50 centavos to P41.