Sale of SMC's Pure Foods bogs down

MANILA, Philippines - Negotiations for the sale of San Miguel Pure Foods Co. Inc. (SMPF) bogged down yesterday after San Miguel Corp. failed to reach an agreement with the Campos family and tuna canner Century Pacific Group.

San Miguel disclosed yesterday that it was keen on selling only up to a 49 percent stake in SMPF, rejecting offers from the final bidders to acquire 100 percent of the food unit.

San Miguel owns 99.92 percent of SMPF, which owns the Pure Foods, Magnolia, Monterey, Star, San Mig Coffee and B-Meg brands.

“At this time, our board has decided that all that should be currently under offer by San Miguel is the sale of a minority stake in our food group,” said Ramon Ang, president and COO of San Miguel.

Sources said the Campos-Century consortium was not keen on buying a minority stake and thus decided to withdraw its bid.

The Campos family owns drugstore giant United Laboratories Inc. and NutriAsia Group, the market leader in the liquid condiments, specialty sauces and cooking oil market in the country. Its flagship brand, UFC, has an 85 percent market share in the local ketchup and hot chili sauce categories.

The NutriAsia Group also controls Del Monte Pacific, a leading food company that markets canned goods, fresh produce and packaged foods in China, India and the Philippines. It produces canned fruits and vegetables and processed foods such as condiments, pasta and sauces.

The Century Pacific Group, on the other hand, produces and distributes canned tuna and sardines under the Century Tuna, Bluebay, 555 and Fresca brands. It also processes canned corned beef, meat loaf, beef loaf and luncheon meat under the brands Argentina and 555.

Their acquisition of SMPF would have given the buyers about 44 percent of the local poultry market and 63 percent of the nation’s hotdog sales.

San Miguel is raising funds to support its ongoing diversification into heavy industries including energy, telecommunications and railways. It has raised around $3 billion from asset sales in the past three years.

Ang earlier said San Miguel might do a follow-on offering for SMPF in case the partial divestment fails.

San Miguel’s B shares, which have no ownership restrictions, fell 2.2 percent to P66.50, the lowest in more than seven months, while SMPF was last traded on Aug.18, closing at P276 each share.