MANILA, Philippines - San Miguel Brewery Inc. (SMB), the flagship domestic brewery firm of diversifying conglomerate San Miguel Corp., said it has signed an agreement to acquire the international beer operations of its parent firm.
In a disclosure to the Philippine Stock Exchange, SMB said it is acquiring 100 percent of San Miguel Brewing International Ltd. with an enterprise value of $300 million. The deal is expected to be completed by end-January 2010, SMB said.
“By integrating both the domestic and international beer business, we can improve the growth ad returns of the business as a whole and broaden SMB’s geographic participation, strengthening our brands and presence in the region,” said Ramon S. Ang, president of San Miguel.
SMB president Roberto Huang, for his part, said: “With this acquisition, SMB is expanding its footprint to a bigger and broader platform in Southeast Asia and China, and potential access to Kirin’s platform in other developed and emerging markets in Asia.”
“Additional brewing facilities overseas will offer greater operating flexibility for SMB’s operations and provide real opportunity for enhancing the already solid performance of our do-mestic operations,” Huang added.
The Royal Bank of Scotland (RBS) was San Miguel’s sole financial adviser for the transaction while ING acted as an independent financial adviser for SMB.
SMB is now 43.25 percent owned by Kirin Holdings Co. Ltd., Japan’s second largest brewery, after acquiring 665.02 million shares held by San Miguel for PP58.9 billion or P8.841 each share.
SMB, which corners 95 percent of the Philippine beer market, produces and markets San Miguel Pale Pilsen, Red Horse, San Mig Light and five other affiliated brands.
To further boost sales, SMB said it will continue to expand its coverage in areas that are currently underserved. It also intends to take advantage of growing consumption in rapidly-urbanizing areas outside Metro Manila.
Instead of just looking at the beer segment, SMB is hoping to capture a larger share of the total alcoholic beverage segment as Red Horse is being positioned to attract more hard liquor consumers, thereby increasing its slice of the market.
The company successfully completed a record-breaking P38.8-billion bond offering – the largest debt offering by a corporate issuer in the country. Proceeds from the offering were used to purchase the domestic beer brand and brewery land assets from San Miguel.