San Miguel sets up to $3.6-B share sale in merged subsidiary

Published April 11, 2018, 12:00 AM

by manilabulletin_admin

 

By Cecilia Yap and Clarissa Batino
(Bloomberg)

San Miguel Corp., the Philippines’ largest company, expects to raise as much as $3.6-billion selling shares of its merged food and drinks unit in the fourth quarter in what could be the country’s biggest share sale on record.

San Miguel Food and Beverage, Inc., which combined three businesses of the group, is now worth $12 billion, President Ramon Ang told reporters at a meeting in Manila on Tuesday. Selling a 30 percent stake may raise as much as $3.6 billion, while a 20 percent slice would generate about $2.4 billion, he said.

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Investors have welcomed Ang’s consolidation of the group’s food and beverage business, helping push the parent’s shares up 21 percent in 2017 and another 27 percent so far this year. The merger makes it easier to make bets on growth in the company’s more than a century-old beer business or on the oil, energy and infrastructure businesses that have helped increase sales by more than five times over the past decade.

“Old businesses are usually forgotten during diversification, but that didn’t happen in our case,” Ang said in Mandaluyong City, Philippines. “We continue to grow and remain bullish on this sector.”

The group’s recurring profit may reach between R65 billion ($1.3 billion) and R70 billion this year from about R55 billion in 2017, with oil unit Petron Corp. and its merged food and drinks business accounting for the bulk, Ang said.

Ang is counting on Philippine economic growth that has topped 6 percent annually in the past six years to help boost sales and fuel San Miguel’s expansion into heavy industries. Projects include an airport that could complement the capital’s 70-year-old facility, which has been ranked among the world’s worst as it handles well beyond the 30 million passengers it was intended to serve.

 
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