Kirin on raising San Miguel Brewery stake: We’ll seriously consider

MANILA, Philippines – Japanese beverage maker Kirin Holdings Company said it would seriously consider buying San Miguel Corporation’s stake in its brewery unit if San Miguel decides to sell it.

Kirin made the statement after San Miguel chief Ramon Ang announced early this year that he received offers for brewery unit San Miguel Brewery Inc. (SMB) and gin unit Ginebra San Miguel Inc.

Kirin and San Miguel are partners in the brewery business. Kirin holds a 48% stake, while San Miguel owns 51%.

“We are satisfied with our partnership with SMC. But if SMC would like to sell then I think Kirin president Mr. (Senji) Miyake will take it seriously and make his own valuation. If we have an official offer from SMC, then we will take it seriously,” Teruyuki Daino, SMB executive vice president and Kirin’s representative to the SMB board, told reporters on the sidelines of the listing of SMB’s P15-billion bond issue on Wednesday, April 2.

Bloomberg earlier quoted Ang as saying that he received $6.6 billion offers for SMB and Ginebra that they would consider if they ever need funds for an energy acquisition.

San Miguel has transformed into a diversified conglomerate, moving away from its traditional food and drinks businesses and investing heavily in oil, power and infrastructure.

Higher SMB sales

Meanwhile, SMB expects better sales volume this year. Higher excise taxes under the sin tax reform law weighed on the company’s sales in 2013.

“Hopefully (sales) will better than last year. We were hit by excise taxes (last year). We are managing our costs and we are looking at efficiencies in operations,” SMB chief finance officer Mercy Marie Amador said.

Amador said SMB has not increased prices yet and is absorbing the impact of the tax adjustment.

While this strategy affects the company’s margins, Amador said it is looking at other ways to manage its costs.

In 2013, SMB posted net sales revenue of P75.1 billion, slightly lower than the P75.6 billion of the prior year as volume fell 9% to 204 million cases.

The company earmarked P1 billion for capital expenditures this year, mainly for the maintenance of plant facilities.

SMB on Tuesday listed P15 billion worth of 7- and 10- year bonds on the Philippine Dealing and Exchangce Corporation. The bonds carried annual interest rates of 5.5% and 6%, respectively.

Proceeds from the bond sale would be used to repay P22.4 billion in maturing debts. – Rappler.com