MANILA, Philippines – Food and beverage conglomerate San Miguel Corp. is hoping to raise up to $700 million from the sale of its international beer operations to San Miguel Brewery Inc. (SMB).
At the sidelines of San Miguel Properties Inc.’s annual stockholders’ meeting yesterday, San Miguel president Ramon S. Ang said the sale of the group’s beer operations overseas could fetch between $600 million to $700 million.
Proceeds from the sale will be used to fund organic expansions and new acquisitions as the conglomerate diversifies into heavy industry such as power, infrastructure and utilities.
The original plan was to sell San Miguel’s international beer operations to Japanese brewer Kirin Holdings Co. Ltd., which acquired a 43.249-percent stake in SMB for P59 billion or P8.841 each share. Even with the sale, San Miguel still holds a majority 51 percent interest in SMB, which produces and markets San Miguel Pale Pilsen, Red Horse, San Mig Light and five other affiliated brands.
San Miguel has been on a buying spree after selling several units to accumulate cash for new businesses with high growth potential.
Ang said the group continues to be on the lookout for acquisitions in several sectors including banking and mining. “Banking is okay for us as they entail minimal investments,” he said.
Property unit San Miguel Properties and the San Miguel Corp. Retirement Plan raised their stake in medium-sized commercial bank Bank of Commerce to 51.1 percent after infusing an additional P2 billion into the bank.
Ang said the group expects to generate around $100 million from the initial public offering of between 10 percent and 14 percent of its packaging unit this year to be used for its continued expansion.
In addition, the group, through San Miguel Properties, is considering selling some of its real estate assets which include a 125-hectare property in Tagaytay, a five-hectare lot in Sucat, Parañaque and a one-hectare property located in Pasay Road.
Ang said these properties could either be sold or developed in joint venture with other companies.
Should they decide to sell these properties, the group expects to receive P1 billion from the sale of each property which could also include a 30-hectare lot in Boracay.
Alan Cruz, head of San Miguel Properties real estate development said the Boracay property was acquired a year ago and if developed, would be converted into a residential condominium building.
Cruz said San Miguel Properties will also break ground by the end of this year a service apartment building in Makati. The project will be a joint venture with state pension fund Government Service Insurance System which owns the 2,615-square meter property.
The project will offer a total of 424 service apartments on 30 storeys.