SMC, RFM set to seal Cosmos sale

San Miguel Corp. and RFM Corp. will seal today the P14-billion sale of soft drink company Cosmos Bottling Corp. (CBC), making SMC the undisputed leader in the country’s beverage industry.

The purchase by the San Miguel group of CBC, the second largest soft drink firm in the Philippines, will be done through its 65 percent subsidiary and dominant beverage company Coca-Cola Bottlers Philippines Inc. (CCBPI) and foreign partner. The Coca-Coca Co. based in Atlanta.

Last September, the SMC group and the Concepcion-controlled RFM signed a share purchase agreement (SPA) that involved the latter’s 83.2-percent stake in CBC at P6.045 per share. With the mandatory tender offer requirement under the Securities Regulation Code, SMC will buy out the remaining minority stockholders at the same price to put the transaction at a total enterprise value of P14 billion.

Cosmos is the fifth major acquisition of the fast-expanding SMC group in less than twoyears, following the purchases of fruit juice maker Sugarland, Australian beer brewer J. Boag & Son, processed food manufacturer Pure Foods Corp. and CCBPI.

But even with the massive cash unloading due to its string of purchases, SMC remains with a formidable war chest for other future investments and expansion following a recent deal with Japan’s Kirin Brewery Co. Ltd.

The agreement, signed last Dec. 14, involved the Japanese brewer’s P27.88- billion equity investment into SMC, equivalent to a 15-percent stake in the company’s expanded capital.

On the part of the RFM group, the proceeds from the sale of CBC will be used for its expansion plans and debt servicing. About P1.2 billion, in particular, will be channeled for the buy-out of its foreign partner WP Argosy Ltd., which has a 21-percent interest in RFM, Corp.