JG, San Miguel in talks over Meralco

MANILA, Philippines (UPDATED) - Friends, enemies, partners and rivals are already among the owners of power giant Manila Electric Co. (Meralco). Will the Gokongweis be the next business group to join them?

San Miguel Corporation, which owns 27.1% of the power retailer, confirmed reports to the stock exchange on Wednesday, September 25, that it is in talks with Gokongwei-led JG Summit Holdings Inc. for a Meralco deal.

"We advise that the company is in talks with JG Summit Holdings Inc with respect to the shares of stocks of the company and its subsidiaries" in Meralco, San Miguel said. 

In a separate disclosure, JG Summit confirmed the reports, too. 

Cited as the reports' source is San Miguel President Ramon Ang who declined to confirm the size and terms of the deal being negotiated. San Miguel's stakes was worth around P84 billion based on Tuesday morning’s price of P276.40 a share.

Both conglomerates are among the Philippines' biggest, as are the current and past owners of Meralco, including the founding Lopez family who has since sold majority of their controlling stake to the group of businessman Manuel V. Pangilinan.

Pangilinan-led Beacon Electronic Asset Holdings Inc. acquired some of the 5.7% Meralco stake San Miguel sold in July, but is no longer keen on further expanding their almost 50% controlling stake.

The Pangilinan and San Miguel groups were engaged in a boardroom battle for control 4 years ago when another Meralco shareholder, pension fund Government Service Insurance System (GSIS), maneuvered a sale.

San Miguel's Meralco shares are among its liquid assets in a business portfolio focused on capital intensive ventures, including power generation, oil refining and distribution, infrastructure, airlines and airports, telecommunications and mining. It was originally one of Asia's biggest food and drinks manufacturers.

Meralco distributes electricity in the country's most profitable franchise — Metro Manila and nearby areas.

JG Summit is engaged in retail, banking, manufacturing, media, among others. It had sold its telecommunications unit Digital Telecommunications to the Pangilinan group. It also controls budget airline Cebu Pacific, a rival of San Miguel unit, legacy carrier Philippine Airlines (PAL). - Rappler.com