SMB acquired international beer unit of SMC
Posted on February 1st, 2010
Food and beverage conglomerate San Miguel Corp. (SMC) recently completed the $300-million sale of the international beer business to its flagship unit San Miguel Brewery (SMB) Inc. Both San Miguel and SMB reported to the Philippines Stock Exchange, separately, the closing of the deal. It marked the completion of the spin-off of all the conglomerate’s beer businesses.
SMC got The Royal Bank of Scotland to act as its sole financial adviser in the transaction, while SMB acquired the services of ING as its independent financial adviser.
The local beer business of the SMC has already been acquired by SMB earlier. SMB is a joint venture between San Miguel and Kirin Group of Japan. SMC owns 51 percent of SMB while Tokyo-based Kirin owns 48 percent. The sale would be funded through borrowings. 10 banks have been hired to arrange a $300-million borrowing.
SMB plans to integrate both the domestic and international beer business, in its effort to improve the growth and returns of the business as a whole and broaden SMB’s geographic participation, and also in strengthening its brands and presence in the region.
As for SMC, the company plans to use the proceeds of the sale to fund its expansions and new acquisitions as the conglomerate diversifies into other industries, like power, infrastructure and utilities.
Among those planned acquisitions is the Subic-Clark-Tarlac Expressway where SMC submitted a bid for the operation and management of the said project. The conglomerate also submitted a bid for the privatization of the 246-megawat Angat hydroelectric power plant in Norzagaray, Bulacan.
Meanwhile, SMB president Roberto Huang said the acquisition would allow the company to expand its footprint on a bigger and broader platform in Southeast Asia and China and provide potential access to Kirin’s other market in Asia. “Additional brewing facilities overseas will offer greater operating flexibility for San Miguel Brewery’s operations and provide real opportunity for enhancing the already solid performance of our domestic operations,” Huang said.
