SMC sells Coca-Cola shares for P28.9B

By PATRICIA DE LEON, GMANews.TV Food and beverage giant San Miguel Corp. on Friday said it has sold its entire 65 percent stake in its local bottling unit to The Coca Cola Company for $590 million or P28.9 billion (at P49 to $1 exchange rate). The actual sale price is lower than the $700 million tag floated in several earlier reports. San Miguel did not confirm those reports. In a statement, San Miguel said the sale of Coca- Cola Bottlers Philippines Inc. to the American firm would give it additional flexibility. "The Company has decided to exit CCBPI to provide the Company longer term commercial flexibility," the San Miguel statement said. Coca-Cola Bottlers Phil. includes units Cosmos Bottling Corp. and Philippine Beverage Partners Inc. The sale agreement includes a clause preventing San Miguel from setting up a bottling business in the Philippines to rival Coca-Cola within five years. "The fact that they have liquefied their investment in Coke should be positive in the long run," trading firm 2TradeAsia managing director Grace Cerdenia. "It's a wise move for San Miguel to dispose of this investment simply because it gives them cash for their other businesses," she added. Cerdenia said San Miguel's bottling business has been a drag to the firm's bottom line, and has performed below market expectations. worth P60B in '97 In April 1997, San Miguel's exchanged a 70 percent interest in Coca-Cola Bottlers Philippines, for a 25 percent stake in Australia-based Coca-Cola Amatil Ltd., the local bottler's parent firm. San Miguel gained $555 million for that transaction, executed under then leader Andres Soriano Jr. In 2001, with Danding Congjuanco at the helm, San Miguel bought back a 65 percent stake in Coca-Cola Bottlers Philippines for P60 billion. This stake is the subject of the most recent sale for $590 million (or P28.9 billion at a P49 to $1 exchange rate). Cerdenia however said the Cojuangco buy back price should not be compared to this latest sale to the Coca-Cola Company because factors other than the transaction price should be considered. "You might not be able to compare the two like apples to apples. But knowing San Miguel, it won't be selling any assets at a loss. That's for sure," Cerdenia said. -GMANews.TV